RB, Sirok oppose bill that will separate CUC’s power, water systems

Noting that creating an agency or department is very costly, Saipan Mayor Ramon Blas “RB” Camacho last Tuesday expressed opposition to a Senate bill that seeks to replace the Commonwealth Utilities Corp. with two independent autonomous public corporations to separately manage and control the power service and water service systems, and create one elected consolidated board for the two public corporations.

CNMI Public Utilities Commission board chair James S. Sirok, on the other hand, said although CPUC does not have a position yet regarding the legislation, just as a general statement they are not in favor of the bill at present time because they feel that it would cause more costs and which would then be passed on to the ratepayers.

Camacho and Sirok expressed their respective positions to Senate Bill 23-29 during the Senate Public Utilities, Transportation & Communications Committee chaired by Sen. Paul A. Manglona (Ind-Rota), who is also the author of the legislation.

Camacho said the CNMI is still on the economic recovery or financial constraint.

Camacho said to his knowledge, CUC’s Water Division has been subsidized by CUC’s Power Division.

“Of course, it’s going to impact its residents here because they need the funding to run their division or department,” said the mayor, adding that right now he believes that this bill is not that feasible.

The mayor said with this bill, two managers are created—one manages the power division and the other manages the water division.

“So, for this time it is not feasible. People are suffering. As you’ll see that there’s a lot of proposed taxes out there in the community,” he pointed out.

Sirok said for CPUC, they don’t have any formal position about the bill as they will have to wait and see until they are able to hire some consultants to look into this legislation and give them an opinion.

“But right now, there’s nothing in front of the commission, other than the bill itself to ask comments on,” he said.

In supplementing his prior statements, Sirok said as a private citizen, having experience within the utility sector, especially with CUC, he is familiar with various rate issues that CUC has.

He said one of those is the fact that the water rates itself and the fact that the power division of CUC at the present time really subsidizes the water expenses and has been doing that for a long time.

Sirok said there hasn’t been a rate modification of CUC’s water rates for more than 10 years.

He said there was a petition that was submitted to the CPUC in 2013 that would have increased the water rates but that was withdrawn.

Sirok said that petition has never been presented to CPUC since that time.

“Now, if we go through your bill, and this is just a thought off the top of my head when I first saw this, is that if you separate the power division and the water division, now you have to have the water division, standing on its own,” Sirok told Manglona.

He said this means that if the water division is not recovering revenue now to cover its actual cost, when it is separated, the water rates are going to go up obviously.

Sirok also noted that that there’s a bill in front of the Senate for consideration that would remove the government rate for all utilities for all government agencies and so there would only be a residential rate and a commercial rate.

He said there’s not much difference between the power rate on the commercial versus the government side, but on the water rate, there’s a large difference.

As to the aspect of the bill requiring the election of the board of directors, Sirok said utilities is a little different than operating a general company.

“I mean, it’s a little more technical in nature. But I have no opposition. We haven’t discussed this within the Commission as to whether or not we favor elected positions. I don’t see any opposition,” he said.

Sirok said, however, he believes that there should be some minimal type of utility experience needed for members to sit on that, either utilities on the power side or water side because there’s a little bit of some technical knowledge that needs to be acquired or known by individuals that are making management decisions within those fields.

James S. Sirok