1.5-cent surcharge ‘null, void’

The Commonwealth Utilities Corp. board of directors has to clear yet another obstacle today in order to implement the fuel surcharge regulation—setting a rate with which to assess customers.

Contrary to previous belief, the utility firm will not be using the 1.5-cent-per-kwh rate, which the board approved on Jan. 25, when CUC starts including the fuel surcharge with the March billing.

CUC chair Francisco Q. Guerrero explained that the 1.5-cent rate is now “null and void” because it was adopted in relation to the emergency regulation that failed to become official.

He said that at today’s special board meeting, CUC comptroller Sohale Samari is expected to present his computation of what the rate adjustment should be, based on the increase in CUC’s fuel costs.

While the published agenda indicated an item “adoption of increase of fuel surcharge fee to $.035,”Guerrero maintained that the board would not find out the management’s recommended rate until the panel meets this afternoon.

CUC management has been pushing for the implementation of a 3.5-cent fuel surcharge since the proposal was first introduced last year.

The law sets 3.5 cents as the maximum adjustment rate that CUC could assess customers during the first year of implementation of the fuel surcharge.

Legal questions and flip-flopping within the CUC board, however, have caused numerous delays in the implementation of the regulation.

The original proposal to apply a 3.5-cent fuel surcharge was proposed in October 2004.

On Nov. 26, 2004, the CUC board approved the regulation with some modifications. This decision would have increased the government and commercial rates by 3.5 cents per kwh, and the residential rate by 1.5 cents.

The board, however, had to make another vote four days later, after the AGO questioned the approved policy for being too different from the version earlier presented to the public and for setting different rates for different classes of customers. A motion to revert back to the original proposal was defeated at the Nov. 30 meeting, with three voting in favor of the plan and three voting against it.

In another attempt to pass the policy, the board majority approved on Jan. 25, 2005 the adoption of an emergency regulation that would lower the rate to 1.5 cents per kwh. Still, this emergency regulation was not finalized because Gov. Juan N. Babauta refused to concur.

However, the Attorney General’s Office came out in February with an opinion saying that CUC may still implement the fuel surcharge by simply disregarding the emergency regulation and adopting the original proposal published on Oct. 26, 2004.