Public comment period starts for planned fuel surcharge

The Commonwealth Utilities Corp. has published draft regulations that will allow for the implementation of a fuel surcharge.

For 30 days starting last Friday, CUC will receive public comments on the proposed fuel surcharge, which will be paid in addition to the basic rate for electric service.

“The proposed fuel surcharge will be added to CUC’s Electric Service Regulations and will allow CUC to pass the increased cost of fuel to CUC to electric service customers. The surcharge will be based only on fuel costs and will fluctuate with changes in fuel costs. Any over-recovery will result in credits to the customers,” CUC said in a public notice published in the Oct. 26 issue of the Commonwealth Register.

The utility firm has scheduled public hearings regarding the proposed adjustment. Rota residents will get a chance to learn more about the fuel surcharge on Nov. 5, 7pm, at the Rota courthouse.

Starting 7pm on Nov. 8, CUC officials will be at the Tinian Elementary School to make a presentation and answer questions regarding the proposal. On Saipan, the public hearing will be held at 7pm, Nov. 10, at the Multi-Purpose Center.

“The purpose of the [fuel surcharge fee] is to pass through to all consumers of CUC electricity, increases and decreases in fuel costs for the production of electricity, which are above or below the base rate allocation for fuel,” the draft regulations stated.

According to the proposal, the initial surcharge should not exceed 3.5 cents per kilowatt hour and should take effect for the remainder of the current calendar year in which the regulation becomes effective.

The initial fuel surcharge is computed by dividing the actual year-to-date and any projected remaining year fuel costs for the current calendar year, by the actual year-to-date and any projected remaining year electric sales—in kWh—for the current calendar year, and then subtracting the base rate allocation for fuel costs.

For subsequent years, the fuel surcharge should not exceed the previous year’s rate by more than 2 cents per kWh for those consumers using less than 2,001 kWh per month.

The fuel surcharge for subsequent years is computed by adding the projected fuel costs for the target year and an adjustment for the preceding year’s under-/over-recovery of fuel costs. The sum is then divided by estimated electric sales, in kWh, for the target year, before subtracting the base rate allocation for fuel costs.

For its part, the monthly fuel surcharge adjustment is computed by adding projected fuel cost for the target month and an adjustment for any prior months’ under-/over-recoveries. The sum is divided by the estimated electric sales for the target month, minus the base rate allocation for fuel costs.

The monthly rate is limited by the annual fuel surcharge ceiling.

The draft regulations require that the fuel costs, which are subject to cost recovery, include only production fuel for power generation. Each costumer’s monthly bill should show separately the base electric rate charge and the fuel charge adjustment.