CUC justifies new base rate, claims service cost within range of region’s utilities

The Commonwealth Utilities Corp. justified yesterday the recent increase in its electric base rate, claiming the current cost for the island’s electric service is in the middle of the range for Pacific island utilities.

“In early 2011, according to Pacific Power Association [PPA], the lowest electric tariff was Fiji at $0.17 per kWh and the highest was Wallis & Futuna at $1.07/kWh. Fiji is a middle income country while Wallis & Futuna is a French territory,” stated CUC in a statement yesterday.

PPA revealed the following service costs in other Pacific island utilities: Guam, $0.21000 per kWh; Oahu, $0.30340 per kWh; Maui, $0.35580 per kWh; Hawaii, $0.40192 per kWh; Molokai, $0.41043 per kWh; Lanai, $0.43541 per kWh; Kauai, $0.44385 per kWh; and CUC, $0.37650 per kWh.

CUC said that while Guam’s rate is lower than the CNMI’s, Guam does not have to maintain a fully functioning power system on more than one island unlike CUC which provides power to Saipan, Rota, and Tinian. Guam, CUC said, also burns heavy fuel which is cheaper than diesel.

According to CUC executive director Abe Utu Malae, the agency paid 5 percent of its total income for maintenance; 6.41 percent was paid to the IPPs that run power plant 4 and Tinian; 6.42 percent was paid for employees’ salaries; and 2.84 percent for miscellaneous expenses.

The Commonwealth Public Utilities Commission last June 6 approved a new base rate, which CUC said is its first rate increase since 2006.

Under the new base rate, average customers who use up to 500 kilowatt hours monthly should expect to see monthly increase of between $1.77 and $2.52 from the new electric base charge.

For larger residential users up to 1,00 kWh, customers can expect a 2.2 percent increase—or approximately $8.52 per month.

CUC said that for residential users up to 2,000 kWh, they can expect a 3-percent increase—or approximately $24.52 per month.

Small commercial businesses should expect to pay another $5.39 to $9.39 up to 500 kWh, and another $17.39 for up to 1,000 kWh per month. Larger businesses will be paying approximately $33.39 more per month for up to 2,000 kWh and $49.39 for up to 3,000 kWh.

Customer’s bill is comprised of levelized adjustment energy clause which pays for the fuel cost and base rate which is utilized in paying for power plants maintenance, personnel, independent power producers, and other operational expenses.