Higher water rates eyed

Customers of the Commonwealth Utilities Corp. should brace themselves for a new rate hike—this time from the water and wastewater division.

A petition to increase water and wastewater rates is all but assured after CUC chief financial officer Charles Warren disclosed yesterday that the division’s operating losses the past eight months ending May 31, 2011 has already amounted to $2.8 million.

Broken down, the operating loss for water is $1.1 million, while wastewater losses amount to $1.7 million.

“We are still working on the details of the rate petition, so no absolute numbers are available right now,” he told Saipan Tribune.

Any rate hike, however, will still have to be approved by the Commonwealth Public Utilities Commission. The commission last approved a rate hike for water and wastewater in May 2010.

CUC records show that the agency has an operational budget of just $11.7 million for water, compared to the $13.3 million expenses already incurred to date.

For wastewater, overall operational expenditure is already at $9.2 million, exceeding the allotted budget of $8.2 million for the entire fiscal year—a shortfall of $1.1 million.

Among the biggest expenditures for the division are salaries and wages of personnel, with a combined cost of $2.8 million; requirements under a stipulated order, with a combined $2.1 million; and other production, $6.9 million. The stipulated order requires CUC to meet certain requirements in order to become compliant with the Clean Water Act.

According to Warren, the CPUC had already recognized the need to cover all expenses of the water and wastewater division.

“At the last CPUC water/wastewater rate decision and order, the commission recognized that the wastewater rates approved during that session may not be adequate to cover the expenses of the division, and therefore authorized the water division to advance funds to the wastewater division if needed,” explained Warren.

He said electricity is the single largest expense of both the water and wastewater divisions.

The CPUC had just approved an increase in the levelized energy adjustment clause rate in response to the higher cost of fuel.

“These higher rates will most likely require an increase in the water and wastewater charges. We’re taking many steps to improve pumping efficiencies and water delivery, which will help to reduce power consumption,” said Warren, adding that the utilities corporation is in the middle of preparing the analyses for the upcoming rate case. “We’ll know what the total requirements are when those analyses are complete.”

At the last CPUC meeting, CUC was expected to present the new rate case in July.

At present, CPUC cannot function due to a lack of members. Viola Alepuyo is currently the only commissioner but her authority to rule on behalf of the entire commission already expired last June 7. The commission requires at least two members to function.