$1.2M monthly earnings from fuel surcharge fee

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Posted on Feb 18 2006

The Commonwealth Utilities Corp. has been generating an additional income of $1.2 million monthly since the fuel surcharge was implemented in April 2005.

A summary of CUC’s collections showed that utility fees paid by residential and commercial customers averaged $4.9 million between October 2004 and April 2005.

As a result of the fuel surcharge implementation, CUC’s collection rose to $6.3 million in May 2005. Utility revenues peaked at $6.6 million in July 2005 and hit a $5.4 million low in November 2005.

But overall, CUC’s collection from households and businesses has averaged $6.1 million from May 2005 to January 2006.

The Fitial administration, which had promised to eliminate the fuel surcharge during the 2005 election campaign, said recently that it was not quite ready yet to remove the additional fee. The administration has set a goal to scrap the fuel surcharge in six months.

Government agencies, as well as residential and commercial customers, are assessed the fuel surcharge, which amounts to 3.5 cents per kilowatt-hour.

However, CUC data do not provide a breakdown of the government’s actual billing and the subsidy provided to the utility.

The government used to pay CUC $650,000 monthly, pursuant to an agreement signed by both parties to extend a temporary restraining order stopping CUC from disconnecting utility service to the government. CUC had sued the government for alleged failure to pay its bills.

But beginning February 2005, the government has been paying CUC over $650,000 to assist the utility in paying for its purchase of power generation fuel.

CUC has been receiving an average of $1.7 million from the government since then.

CUC data also showed that the previous administration paid CUC $2.8 million in May 2005, on the same month that then Gov. Juan N. Babauta declared CUC under a state of emergency.

The government made no payment in June 2005, but paid CUC amounts ranging from $1.5 million to $2.5 million between July 2005 and January 2006.

Over the past 16 months, government payments have accounted for 18 percent of CUC’s total collections.

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