Operating utilities in today’s principles and real prices!

The October edition of the Commonwealth Register published an amendment to the Commonwealth Utilities Corp. Electric Regulations. The proposed amendment creates a separate line item that creates a method by which current and future boards deal with world’s tremendous fluctuating fuel prices. Current and future boards specifically, and exclusively, use calculated accounting methods to pass along to customers increasing fuel prices, and to credit customer accounts as fuel prices decrease.

The Commonwealth Register stage provides customers a minimum of 30-days to comment on the proposed fuel surcharge.

The CUC board also conducts public hearings on Rota, Tinian, and Saipan:

The Saipan Public Hearing is tonight (Wednesday) at 7:00 at the Multi Purpose Center.

CUC obtains fuel from the Singapore refineries. The price of this fuel is set on the day the ship is loaded and departs the Singapore docks.

* Only two commercial firms, Mobil Oil Micronesia and Shell Oil, bid for contracts that deliver expensive ship fees and costs to all Micronesian communities. Currently, CUC operates in a contract with Mobil Oil.

* Fuel arrives every 28 days, or sooner depending upon customer demand.

* The invoice for each fuel delivery is not even derived until approximately 30-days after delivery, once all factors are priced and charged.
After the 30-day acceptance of all verbal comments, written acknowledgements, and statements, the board considers all facts and must vote a second and final time.

* This vote for the Electric Regulations amendment is a line item only for fuel surcharges. The final vote may take place in a Special Meeting in November, or during the regularly scheduled December meeting: always on the first Thursday of the month.

* All board of director meetings are advertised so that citizens are welcome to watch and participate, through public comments, taking part in the decision-making process and are more likely to understand and stay involved in public, or semi-public utilities and local government.

The current board appreciates comments and questions about the accounting methods, the recent and continuing measures to first make budget cuts on every other function, just to pay Mobil Oil and local vendors on time—not to mention the that the payroll of a largely-reduced workforce is required twice monthly.

Personal attacks, however, are unprofessional and stifle other people’s right to also comment, and to clarify issues.

Critics say and write that CUC will mix, merge, or mingle the fuel surcharge with day-to-day operations, vehicles, power poles, streetlights, or travel expenses or salaries. To the contrary, the CUC twice adopted balanced budgets well ahead of fiscal years 2004 and 2005, while other agencies or government haven’t.

To ensure that ALL funds are now managed and never mingled or allocated elsewhere, CUC hired its new Comptroller from the Office of the Public Auditor, who in one month works with the executive director and board to merge and centralize operations, with monthly savings estimates of $60,000, and CUC implements Ethic’s Training and new streamline, regulatory procurement methods.

The fuel surcharge pays for the fuel, oil, and delivery fees to all three islands operating as a single corporation. Should the CUC board of directors soon adopt the fuel surcharge amendment in the electric regulations, customers will see a separate line on the January bill:

Fuel Surcharge: 3.5 cents times (X) each kilowatt-hour Number Khr Month (or reduced or credited per world fuel production prices).

In the event that customers remain doubtful or have read data on these editorial pages that leads readers to incorrectly think that Tinian’s power operations could stand alone, think again—with real facts and data.

* The readers were never told that CUC is ONE corporation—and when the fuel is delivered to Saipan, CUC must ensure that Tinian’s Telesource receives free fuel from the one and only CUC.

* It takes more money to make additional deliveries to Rota and Tinian. The truth is that Tinian’s rates are really estimated at 18 cents—not even including the computers from Saipan, the technical assistance, our time to clear these issues, the CUC monthly bills, procurement for extremely obscure items, and warehousing, then delivery items when needed, and customer service to conduct research and investigations.

* We know that Tinian operations, its deputy director and staff are hard working and have reached outstanding management; coincidentally, the residents of Rota would pay even more—IF WE WERE TO DISCUSS OPERATIONAL FEES. Our other colleagues seem to comprehend world events without blaming CUC’s board of directors, or those who walked the path before.

* Yet, the one issue is a fuel fee, not CUC’s residential rate at only 11 cents per kilowatt-hour. In fact, the CUC has NEVER increased electric rates, nor is the board proposing to increase rates—it wants simply to provide a method to handle fluctuating fuel fees—that does NOT mean the surcharge stays on the bill “forever.” The customer bills decrease immediately upon a decreasing fuel price and CUC’s contractual fuel fee.

CUC OPERATIONAL FUNDS & GOVERNMENT PAYMENT

CUC clearly agrees with customers who feel they should not pay for fuel until the CNMI government pays for its electricity. Yet, if CUC cuts the government office utilities, like so many of you feel strongly about, we also realize that after a few days without services, the public would then blame CUC and urge that the computers work, and business get back to normal. This is an issue now in court. This is why the judge ordered that the Department of Finance first negotiates payment plans and perhaps settlement with CUC.

CUC wants to inform all customers that a simple fuel surcharge will not, nor has it ever been intended, to pay for previous financial misdeeds or merely a utility that was never correctly balanced with capital and policy support.

Should you have additional questions, or simply wish to comment on the proposed fluctuating fuel surcharge policy, kindly address them to CUC Board Chairman Frank Q. Guerrero at P.O. Box 501220 Saipan, MP or email PIO@CUC.gov.mp.

Frank Q. Guerrero
Chairman, Board of Directors
Commonwealth Utilities Corp.