‘Separating power, water will drive up costs’

Separating the Commonwealth Utilities Corp.’s power and water systems will drive up costs that will then be passed on to customers, according to Kevin Watson, CUC’s deputy executive director for the Water and Wastewater Division.

“There would be no way around it,” he said during a Senate Public Utilities, Transportation & Communications Committee meeting on Tuesday.

In the committee’s deliberation on Senate Bill 23-29, which aims to split CUC into two to separately manage the power and water service systems, Watson said that splitting power and water systems into two and having two human resources managers and two accounting divisions wouldn’t be an efficient way to run the business.

S.B. 23-29 was authored by Sen. Paul A. Manglona (Ind-Rota). It seeks to replace CUC with two independent autonomous public corporations, but create one elected consolidated board for the two entities.

In response to questions from Manglona, who also chairs the committee, acting CUC executive director Betty G. Terlaje said the shared administrative expenses would be one concern.

“Like the Human Resources, how do we charge their expenses to power and water? I mean, right now we do that for allocation purposes,” Terlaje said.

For instance, some departments share vehicles.

“So if you’re going to sever today, then I need to know if the meter readers [will] go with power or water. Or if we split them, we’d still need to hire more for each division because it takes that much to read the routes. …We’d have to buy more vehicles,” Terlaje said.

As for the technology devices that are used to read the meters, Terlaje said the question is which side will inherit the devices—the power side or the water side?

“We pay for the building. How do we split the building up? We have current grants for a building. Is that going to be for power or for water now?” Terlaje asked.

She said it will get messy unless they get a cash infusion right away to resolve those immediate items that need to be taken care of to allow for continuous operation.

As for the proposed elected board, Terlaje said it will come down to who is best equipped to manage the corporation.

“Whoever sits up there, whether it’s an elected person or the governor’s appointee, we always want the best person to represent and be neutral and act in the best interest of the Commonwealth. So, either way it goes,” Terlaje said.