Power rate cut faces rough sailing in House

A legislative proposal reducing the cost of electricity in the Northern Marianas is likely to face strong challenge from members of the House of Representatives in view of the administration’s opposition against the move, according to Senate Vice President Thomas P. Villagomez.

“It will be a very difficult process,” said the chair of the Senate committee on Public Utilities, Transportation and Communication which is currently reviewing the measure sponsored by Sen. Edward U. Maratita.

The panel is expected to come up with recommendation on the proposed power rate cut by the end of this month, but it is not sure whether the Senate bill will be voted on the floor.

Villagomez at the same time prodded the Commonwealth Utilities Corporation to go over its current policies on commercial and residential use of utility services, particularly the existing rates charged to its customers.

“One thing I would like to ask the board is to review that proposed legislation,” the senator explained, “and if we can accommodate some adjustments on the rate for consumers, be it business or individual homeowners, then we can act on that since they are in the process of reducing the government rate.”

Maratita has sought a 25 percent cut in the electricity cost on the island, bringing down the rate for residential customers from 11 cents to nine cents per kilowatt-hour, while 16 cents to 11 cents for business establishments.

He said the move is part of the decision of CUC to slash government power rate from 20 cents to 16 cents in what the utility corporation stressed is intended to help the cash-strapped government at this time of worsening economic crisis.

But CUC officials have warned against impact of the legislated rate reduction on its financial standing, saying this will only throw the state-owned utility corporation back to government subsidy.

Gov. Pedro P. Tenorio has also cautioned the Legislature on the implication of the move to the constitutional mandate of the autonomous agency, which must maintain a sound financial record to be eligible for capital improvement project funds.

According to Villagomez, the committee will consider this position in the forthcoming recommendation before they act on the measure.

“We will have to decide what to do next with the knowledge that if we put it out on the floor, and it goes to the House, knowing the position of the administration, they might not act on it,” he said.

Villagomez instead suggested that CUC be allowed to revisit its rules and regulations, especially the rates, fees and other charges imposed for the right to receive utility services.

“But rather doing it through legislation, I personally think that they can do this, although we have our own legislative authority,” he pointed out. “Then perhaps we will get something out of it.”