‘Some new hotels uncertain about CUC’s incentive rate’

The Commonwealth Utilities Corp., through rate consultant economists.com managing director Robert Young, has reported to the CUC board that some “new hotels” are hesitant to avail of the incentive rate tariff being proposed for large customers.

Young disclosed that these customers have expressed “uncertainty” in the rates to be offered under the soon-to-be approved IR tariff.

“There are some uncertainties expressed by the new hotels for they don’t know what the rate will be,” said Young.

Originally, CUC is targeting to entice eight or nine large customers—majority of them hotels—to reconnect to CUC grid for their power supply.

As of last week, Young reported that at least three hotels indicated that their participation will depend on the final contract to be signed.

Young specifically reported that based on his conversation with Aqua Resort Hotel, the facility has decided not to participate in the incentive program because it had just signed a contract for the fuel supply of its generators.

After extensive discussion and rebuttals, consultants for both CUC and the Commonwealth Public Utilities Commission agreed on May 28 to submit a joint stipulation on the incentive rate tariff.

The IR proposal would be applicable to three classes of commercial customers, once CPUC approves its implementation. These include commercial customers with generation capacity of 400 kW or greater and generate 90 percent or more of their annual electric needs. Also eligible are commercial customers that expand their existing facility that results in an increase load of 200 kW or greater or expand their hotel by 75 rooms or greater. Lastly, the proposed IR is also for new commercial customers with electric generation capacity of 400 kW or greater.

The purchases under the IR will be effective for four years, based on the parties’ proposal.

Under the proposed incentive rate tariff, these customers will pay 33.416 cents per kWh, which includes the LEAC that is currently in effect.

Both Georgetown and economists.com further agreed that CPUC should approve an experimental tariff rider IR to CUC’s existing commercial rate with a signup or open enrollment window of four months from the date the master incentive rate contract is approved.

CUC will also submit its proposed master incentive rate contract for review and approval by the commission by July 31, 2014.

The joint stipulation provides that the CPUC reserves the right to annually review the tariff and may change the rates offered.