‘Fuel surcharge poses more problems’

Expressing his reservation over the proposed imposition of a fuel surcharge fee on utility rates, Lt. Gov. Diego T. Benavente cautioned that pursuing such an idea would spell more financial problems.

“The idea of raising surcharges based on fuel cost I think is something contrary to what most of the states do. And we don’t do that. I think that really presents more serious financial troubles,” he said in an interview at Mt. Carmel School’s activity yesterday.

He said he prefers to have a comprehensive review of the Commonwealth Utility Corp.’s existing rates and set a guideline that would address a situation where fuel costs rises or decreases.

“I would certainly agree to look at our utility rates to include the flexibility of charging based on fuel cost… I think what we should do is take a look at the existing rates and have a provision on the fuel cost so that in the future when the fuel cost goes down it benefits the consumers and if fuel cost goes up, it gets added on because that’s something that’s not foreseeable,” he said.

This developed as the Commonwealth Utilities Corp. reiterated Tuesday the urgent need for a fuel adjustment fee following the increase in fuel costs.

CUC said the new charge is most crucial especially when the government has been failing to make payments for its multi-million utility debts.

CUC said its daily operation has gone up to $280,000 (from an average of $275,000).

So far, CUC said, its fuel expenses rose by $3.6 million in the first nine months of the fiscal year compared with the same period last year.

CUC said it would be able to cushion the impact of the fuel price hikes if only the government pays its outstanding debt, amounting to $17.9 million.

Given the current fiscal condition, CUC conceded that a settlement of the amount at this time is unlikely.

CUC cited that “governor’s financial advisers” have recommended the fuel adjustment charge.

“Either the government pays, or the cost of fuel is passed on to the public,” CUC chair Francisco Q. Guerrero had said.

CUC said it would stop the fuel surcharge once fuel prices go down.

CUC has been planning to impose a fuel surcharge of up to 3.5 cents per kilowatt-hour since last May. It said that the fee would permit CUC “to recover increases and to pass on decreases in fuel costs.”

Such fee is a charge or credit that is applied to each kilowatt-hour of electricity sold, which is computed each month.

At present, CUC charges residential customers 11 cents per kwh and commercial customers 16 cents per kwh.