House OKs subsidy for CUC fuel

The House of Representatives voted yesterday to impose a 4-cent fuel surcharge fee on the government and exempt other power users from being charged the fee.

The lawmakers voted 10-2-4 in favor of House Bill 264, which provides that the government shall be charged a total of 20 cents per kilowatt hour: 16 cents will serve as payment for the electric bill, while 4 cents will be deposited into a special account to defray the additional costs of fuel.

“The Legislature finds that the consumers of electricity should not bear the exorbitant and excessive cost of a fuel surcharge in light of [the Commonwealth Utilities Corp.’s] mismanagement and lack of planning for such a crisis,” it said.

The bill, authored by House Vice Speaker Timothy Villagomez, now goes to the Senate for similar approval.

Villagomez pointed out that the government rate for electricity was originally 20 cents per kwh prior to 1992.

The bill limits the use of the special account—to which the 4 cents would be deposited to—for fuel expenses and not for CUC’s operations.

“The funds can only be used to defray the additional costs of fuel. If there are surplus funds, those funds will be deposited into the general fund,” it said.

The bill, at the same time, requires CUC to reduce its operational expenses by 10 percent, collect receivables aggressively, and improve the efficiency of its generators, as well as the entire corporation.

It asks the CUC hire an independent auditing firm to evaluate the true cost of power production and distribution.

The measure cites a crisis situation at CUC due to increased fuel costs and the lack of cash flow in its bank accounts. This crisis, the measure says, is due to CUC’s inability to collect receivables from residential, commercial, and government sector; deterioration and inefficiency of CUC generators; and CUC’s mismanagement and lack of planning.

Meanwhile, the bill assigns the Secretary of Finance as the expenditure authority for the special account.

The Finance Department shall remit funds from the account on a monthly basis to CUC upon its certification of additional cost of fuel each month.

This comes in the wake of CUC’s plan to impose an across-the-board 3.5 cent fuel surcharge fee beginning early next month.

The Executive Branch had suggested lowering the surcharge fee for other consumers to 2.5 cents and the government at 1 cent in the form of subsidy. Lt. Gov. Diego T. Benavente said this would mean a $150,000 monthly subsidy from the government.

Meantime, Rep. Jesus Attao said the imposition of 4-cent subsidy would be irrelevant, considering that the government could not even afford to pay its alleged debt of over $17 million in electricity bills.

Villagomez, however, said that the bill would put the government on alert. “They [government] have to do something. They need to find a way to fund it,” he said.

House Speaker Benigno Fitial said “the government should be responsible; the government should bear the burden.”