Fuel surcharge takes effect Monday

The Commonwealth Utilities Corp. can start assessing a fuel surcharge of 1.5 cents per kwh for all customers on Monday, with the Attorney General’s Office issuing a final opinion that clarifies legal concerns regarding the regulation.

The final and adopted fuel surcharge policy was published with the AGO’s approval in the Feb. 17, 2005 edition of the Commonwealth Register.

In accordance with the Administrative Procedures Act, which states that an adopted regulation takes effect 10 days upon publication, the fuel surcharge policy will become effective Feb. 28.

In a memorandum, CUC legal counsel Kay Delafield said the attorney general issued a written legal opinion allowing the utility firm to adopt as permanent the original fuel surcharge regulation published on Oct. 26, 2004.

Questions had been raised about the legality of such a move, given the disparate decisions made by the CUC board since it put out the original proposal to charge all customers an extra 3.5 cents per kwh.

On Nov. 26, the CUC board approved the fuel surcharge regulations with some modifications. The board’s decision would have increased the government and commercial rates by 3.5 cents per kwh, and the residential rate by 1.5 cents.

The board, however, had to make another vote four days later, after the AGO questioned the approved regulation for being too different from the version earlier presented to the public and for setting different rates for different classes of customers. The proposed 3.5-cent fuel surcharge failed to receive enough votes at the Nov. 30 meeting, with three voting in favor of the plan and three voting against it.

In another attempt to pass the policy, the board majority approved on Jan. 25 the adoption of an emergency regulation that would implement a 1.5-cent fuel surcharge. An emergency regulation needs only the governor’s concurrence for it to become effective.

Gov. Juan N. Babauta however refused to concur.

Earlier this month, CUC officials and attorneys opined that the utility firm might have to re-publish the whole regulation and undergo the required 30-day public comment period before it can adopt the policy under normal procedures.

But after a Feb. 14 meeting with the AGO, Delafield reported that the attorney general has issued an opinion removing any obstacle to the final promulgation of the regulation.

“The attorney general found that the two regulations [the one published on Oct. 26, 2004 and the one approved on Jan. 25, 2005] did not differ materially. Thus, publication would give the regulation full affect as an adoption after publication, notice, and hearing,” Delafield said.