AGO: legislated power rate cut unconstitutional

Citing constitutional prohibitions, the Attorney General’s Office has backed up the governor and the Commonwealth Utilities Corporation on their opposition against a legislated policy lowering the cost of electricity on the island.

Assistant Attorney General Elliott A. Sattler said it would be unconstitutional as it would violate provisions forbidding impairment of existing contracts between the CNMI and Washington governing CUC operations.

AGO is ready to argue the legality of Senate Bill 11-115 which seeks to cut by an average of 25 percent the existing power rate charged by the government-owned utility firm for its residential and commercial customers.

According to Sattler, both the constitutions of the U.S. and the Commonwealth prohibit the enactment of any law that would “impair” an existing contract.

At present, both CNMI and Washington have agreements regarding operations of the utility corporation, including rates and fees it may or may not charge as well as collection and application of these revenues.

“Insofar as any of the proposals of SB 11-115 are at a variance with or contrary to the (agreements) currently existing between the CUC and/or the CNMI government and/or the United States government, such legislation would be unconstitutional,” Sattler said in a letter to Senate Vice President Thomas P. Villagomez.

The senator, who also chairs the Senate Committee on Public Utilities, Transportation and Communications, is currently reviewing the measure offered by Sen. Edward U. Maratita before it goes to the floor for voting.

Gov. Pedro P. Tenorio and CUC officials earlier have warned lawmakers against the plan, calling the legislated rate reduction a “disaster” at a time when the utility corporation is on its way of achieving self-sufficiency and away from heavy subsidy.

Under SB 11-115, power rate will go down from the current 11 cents to nine cents per kilowatt-hour for residential and 16 cents to 11 cents for commercial.

Maratita has defended the measure, noting CUC has agreed to lower government power rate from 20 cents to 16 cents — a move that should also be considered for all its customers due to the present economic difficulties, while it continues to get subsidy through appropriations for its infrastructure projects.

The AG had opposed a similar move in 1994 when the Legislature offered a bill seeking mandatory reduction in power rate charged by the government-owned utility firm, citing the constitutional prohibitions.