SCC says 3.5 cents surcharge ‘extreme’

The Saipan Chamber of Commerce has urged the Commonwealth Utilities Corp. to reconsider its proposal to implement a fuel surcharge of 3.5 cents per kilowatt-hour, saying the adjustment is too extreme.

Chamber president Alex Sablan, who attended public hearing held by CUC on Tinian last Monday, said he understands the utility firm’s need to implement a fuel surcharge fee but that a 3.5-cent increase is not justified, given the various actions CUC could take to lessen the impact of fuel price hikes on utility customers.

“I don’t have the number for them. I think that’s something that CUC needs to come up with, once they’ve look at our ideas for revenue generation,” Sablan said, expressing belief that 1 to 1.5 cents is a more reasonable for a fuel surcharge.

“They’re asking the public to take a 35-percent increase. That is, in our view, a bit extreme,” he added.

According to Sablan, CUC should consider conducting a CNMI-wide audit of customers to see who have electric meters and who do not. He made this suggestion based on a report that the difference between power produced and that actually metered and billed translates to approximately $575,000 a month or $6.9 million a year in lost energy charge.

He also noted that 22 to 25 percent of Saipan power consumers have been reported to be out of the power grid, which by current figures translates to an estimated $12 million to $15 million in lost revenue.

Sablan said CUC could make the billing process fair by ensuring everyone is metered.

In addition, Sablan said CUC should also look at converting its power plant back to utilizing the No. 2 bunker oil, rather than using the more expensive low sulfur automotive diesel oil the plant currently burns.

Sablan admitted that the use of bunker oil would require CUC to increase its maintenance schedule and therefore, more frequent power outages. But he expressed confidence that these disadvantages far outweigh the amount of money CUC currently spends for diesel oil.

“We’re already doing load shedding today. I think the people of the Commonwealth, if posed the question, would prefer to share in the burden of power outages rather than take a 35-percent increase in their bills. It’s a matter of money out of the pocket versus time without power,” Sablan said.

He noted that all CUC would need to do was to give residents and businesses enough time to plan for power outages.