Govt subsidy eyed for CUC fuel

Acting Gov. Diego T. Benavente favors a gradual implementation of the fuel surcharge fee, coupled with government subsidy, to ensure a stable supply of power in the Commonwealth.

Benavente, who met with Commonwealth Utilities Corp. officials yesterday morning, said his proposal “is to break it [surcharge fee] down so the impact is not very burdensome.”

He said this means “having different rates, gradual implementation, and with [government] subsidy.”

“The thing is if the increase is less than 3.5 cents, we’d expect more power problems,” he said in an interview yesterday.

Benavente, as quoted by CUC officials during a separate meeting with Vice Speaker Timothy Villagomez yesterday, proposes a 1 cent subsidy from the government—to be appropriated by the Legislature—and the implementation of a 2.5 cents fuel surcharge fee for residential and commercial users.

While Benavente is pushing for a legislated subsidy, Villagomez is advising CUC to run to the Executive Branch to get emergency funds to avoid implementing the FSF by next month.

“The governor has reprogramming authority. What would prevent CUC from [implementing the fuel surcharge] is for them to get new cash. Where do you ask for it other than the government in the form of subsidy? I favor this than burden the people,” he said.

He said Benavente’s proposed legislated subsidy would “take a considerable time.”

“Time is of essence here. One of the most pressing matters right now is that CUC needs cash inflow. I think the government can help and can prevent this from happening,” Villagomez said.

He said any government aid to CUC must take place before the December 7 billing. “CUC needs to go back to the administration. Otherwise, there is no choice left for CUC but to do this or face bankruptcy,” he said.

He said CUC needs $5 million by the end of the year.

Meantime, Villagomez said he would introduce his proposed interim fuel surcharge fee bill when the House holds a session Wednesday next week. His proposal provides for a bigger government share of $2.5 cents in the form of subsidy.

Villagomez, who also chairs the House Committee on Public Utilities, Transportation, and Communications, said an interim FSF would mean keeping the current rate for residential users, imposing 1 cent per kilowatt hour for commercial users, and 2.5 cents for government users.

The CUC currently charges residential users a flat rate of 11 cents per kwh and 16 cents for commercial and government consumers.

CUC aims to impose at least 3.5 cents per kwh across the board beginning early next month in view of fuel price increases worldwide. CUC said it pays nearly $5million a month for fuel each month and is complaining that it is fast running out of funds, unless it implements the fuel surcharge fee.