Villagomez renews opposition to CUC’s fuel surcharge fee

Vice Speaker Timothy P. Villagomez has renewed his opposition to the Commonwealth Utility Corp.’s fuel surcharge fee on residential and commercial consumers.

“I join many of my constituents in opposing this big increase in utility costs,” said Villagomez, whohas received numerous calls from many constituents frustrated with the fuel surcharge fee.

CUC initially imposed a 1.5-cent fuel surcharge fee per kilowatt-hour but quickly raised the rate to 3.5 cents per kilowatt-hour within a few weeks.

Villagomez joins Speaker Benigno R. Fitial and his other colleagues in the House leadership in opposing the fuel surcharge fee, which is widely expected to adversely affect the CNMI’s stagnant economy.

In a March 24 letter to CUC chair Francisco Q. Guerrero, Fitial denounced the fuel surcharge fee, saying it will “have a very detrimental effect on our long struggling local economy.” Fitial argued that the fee would likely hurt local businesses, particularly vulnerable small businesses, and contribute to greater inflation and unemployment.

In his letter, Fitial also expressed concern over the surcharge fee’s potential effect on tax collections, as business profits contract because of the higher cost of doing business. The speaker was also particularly concerned about the fee’s potentially devastating impact upon the average family or household, which might not be able to afford such a steep fee increase.

Local business groups, such as the Saipan Chamber of Commerce and the Hotel Association of the Northern Mariana Islands, have previously registered their dismay over the CUC fuel surcharge fee, saying it would hurt businesses and private consumers at a time when the CNMI’s economy is still very vulnerable.

Villagomez had previously proposed at least three separate alternatives to the surcharge fee: an increase in the government’s utility rate, the use of Compact impact funds, and the waiver of CUC’s massive debt to the Commonwealth Development Authority. He has also called on the governor to reprogram funds to pay for the central government’s overdue CUC bills, which reportedly amounts to more than $20 million in potential CUC accounts receivables.

Villagomez regards the government’s huge debt to CUC as a primary cause of the fuel surcharge fee. “It’s one of the primary factors behind CUC’s deep financial problems,” he said.

The lawmaker, who chairs the House Committee on Public Utilities, Transportation and Communications, is closely monitoring CUC’s financial condition and plans to conduct further inquiries and public hearings, including a possible oversight hearing on the fuel surcharge fee issue.