House minority eyes solution to surcharge

House minority leader Arnold I. Palacios said his group is undertaking a study on how to properly address the Commonwealth Utilities Corp. funding woes, particularly relating to the fuel cost.

“We need to sit down with CUC. We have to look at the recommendations of experts,” said Palacios, adding that there are a number of options that can be pursued to ease the financial burden on consumers.

He said there is a proposal to sequester funds from the budget or earmark certain taxes to pay off the fuel surcharge.

He said there are discussions of possible subsidy on the fuel surcharge of up to 2,000 kilowatt hour.

“We could probably subsidize up to 2,000 kilowatt hour, which is $70 a month based on a 3.5 cent per kilowatt hour. We’d look for resources to subsidize. Anything above that, the user should be the one to handle it,” said the congressman.

He said the 2,000-kilowatt hour limit is an estimated average monthly electricity consumption of a family of four.

“We’re still looking at all possible options. Definitely there’s no shortage of ideas here. We just need to work together not only with the minority group but the Legislature as a whole,” said Palacios.

This came after the House leadership introduced a bill proposing to raise the CUC electricity rates in exchange for the removal of the fuel surcharge and the write-off of the $45 million debt of the utility firm with the Commonwealth Development Authority.

Vice Speaker Timothy P. Villagomez offered House Bill 14-362, which aims to raise the electricity rate for residential and non-profit groups from 11 cents to 13 cents; commercial users from 16 cents to 18 cents; and government from 16 cents to 39 cents.

Villagomez said the residential rate increase shall not apply to residential customers who use less than 2,001 kilowatt hour per month.

Meantime, he said the government rate shall be reduced to 18 cents per kilowatt hour upon the payment of its $18 million outstanding debt with CUC.

He said that based on his proposed rates, CUC would collect an additional $20 million from residential and non-profit customers, $38.8 million from commercial customers, and $19.3 million from the government.

He said this would “cover the additional cost of fuel without having to impose a fuel surcharge fee.”

He said that CUC generates 420 million kilowatts hour a year or about $60 million in projected revenues.

CUC said it needs $72 million for fuel supply amid increasing prices of oil worldwide.

CUC also reports a 25-percent power loss.