Palacios asked to require CUC to produce cost-of-service study

Grassroots, volunteer-based organization Hands of the Community has written to Gov. Arnold I. Palacios urging him to require the Commonwealth Utilities Corp. to initiate a cost-of-service study in partnership with the National Renewable Energy Laboratory, a federally owned national energy laboratory.

The organization, headed by Candice Muna, Analee Villagomez, and Alexandra Villagomez, in a letter to Palacios, said that on behalf of all CNMI ratepayers, they strongly urge Palacios to require CUC to initiate a cost-of-service study.

“This study is essential to accurately identify the true cost of providing power, water, and wastewater services to government, commercial, and residential ratepayers in the Commonwealth of the Northern Mariana Islands. For full transparency, we would like to confirm that we have no direct affiliation with NREL or any other similar entity,” said the letter.

Hands of the Community, or Kannai Komunidat-Payúúr Toulap, a volunteer-led group of community advocates, has gathered more than 2,347 signatures in an online and physical petition from CNMI residents and supporters in just two weeks, calling for greater transparency, accountability, and affordability in our CUC utility services.

“This overwhelming response underscores the pressing need for a transparent and credible analysis that reveals the actual cost structure behind CUC’s utility services, thereby ensuring that rates are both fair and reflective of genuine costs,” said the letter.

The letter explains that NREL-led cost-of-service study would bring unparalleled credibility and rigor to this essential work.

“As a respected entity of the U.S. Department of Energy, NREL has the expertise and independence necessary to ensure unbiased, transparent, and community- focused findings. NREL’s team approach, utilizing a diverse group of subject matter experts, would deliver a holistic and reliable assessment far beyond what a single consultant could provide. Additionally, the U.S. Office of Insular Affairs offers federal funding specifically for studies such as this one, making an NREL partnership both financially feasible and logistically sound,” said the letter.

According to the letter, despite NREL’s longstanding expertise and offers to assist, CUC management has allegedly consistently bypassed NREL’s involvement since at least 2015, as referenced in the CUC Integrated Resource Plan of 2015.

“Instead, CUC has engaged a private firm, Economists.com LLC, whose preexisting contract with CUC, paid for with ratepayer funds, and limited transparency raises concerns over accountability and transparency in rate-setting practices. This approach has undermined public trust, as it places a critical study that affects the lives of all ratepayers in the hands of a private entity without the same level of public oversight, credibility, and a team of subject matter experts as NREL,” said the letter.

Furthermore, in her role as a grants writer at CUC, Muña says she has witnessed CUC management’s repeated disregard for NREL’s offers to conduct this critical Cost of Service Study.

“CUC management’s repeated disregard for federal resources and expertise has resulted in delays that hinder an unbiased, federally-backed analysis of utility costs. To rebuild public trust and ensure a fair rate-setting process, we respectfully request your intervention to mandate that CUC collaborate with NREL to conduct the cost-of-service study as well as other necessary studies, such as the Electrical Rate Study. By requiring CUC to work with NREL, you will ensure that CNMI’s ratepayers and taxpayers receive a credible and objective assessment that prioritizes transparency, integrity, and equity for all utility users,” said the group.