Teno welcomes power rate cut
A decision by the Commonwealth Utilities Corporation to lower the current electricity charges for the government is a fair move, according to Gov. Pedro P. Tenorio.
He said the government has provided CUC waiver in the payment of fuel tax, adding that this is another form of public subsidy that only boosts savings for the utility corporation.
“It’s only fair because the government is the major customer of CUC,” the governor told reporters.
Last week, the Board of Directors of the government-owned corporation voted to lower its power rate from the present 20 cents per kilowatt-hour to 16 cents, which is the same rate offered to commercial users.
Scheduled to take effect later this month, the adjustment will mean savings of between $1 million to $1.5 million each year to the government whose annual electric consumption costs average more than $8 million.
CUC officials maintained the reduction is intended to help the cash-strapped government as well as to wean the utility agency away from huge public subsidy.
The higher rate had been in place since early 1990s after CUC suffered serious financial setback due to mismanagement of its funds and the government agreed to pay 20 cents for electricity charges to bail out the agency.
A tax imposed on fuel consumption has also been waived by the government for the utility corporation to help improve its financial standing.
“Of course, we’d like to see that the government rate be reduced because the reason why the government gave the waiver for fuel tax is to cover some of that expense,” Tenorio explained. “So it’s about time they should consider that.”
The plan to reduce the rate was initiated last November by CUC amid the Commonwealth’s deepening financial crisis spawned by continuous decline in tourism revenues.
It also came immediately after the board expressed worry over failure by the government to pay some $6.8 million in utility bills that have accumulated over the last six months.
Tenorio said last week his administration would step up ongoing austerity measures to settle the debt and other mounting financial obligations.
