CHCC seeks power rate change

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Posted on Nov 13 2020

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The Commonwealth Healthcare Corp. is working to change its power rate from government to commercial, which is being touted as a means to lower CHCC’s monthly power bill.

At the regular CUC board meeting yesterday, CUC board member Matthew Holley stated in a text message that CHCC has been on the higher government rate and is asking to have the commercial rate, which is lower.

If CUC and CHCC agree to this change, CHCC will be able to get a lower rate for future utility bills. The proposal also has a retroactive feature that would make CHCC’s previous bills lesser, making it a loss that will be absorbed by CUC.

This, however, is still a sticking point and CUC is still weighing the merits of lowering CHCC’s rate. CUC chair Miranda V. Manglona stated that she wants a board member with a “fresh mind” to weigh in on this in a later meeting with CHCC’s board, which Holley agreed to attend with her.

Since April 17, 2014, CUC’s base rate, which is used to fund CUC operations, projects, and debt service, has not been increased and has remained at $0.0210 per kilowatt-hour for 1 to 350 kWhs of power consumption for residential customers. That goes up to $0.1130 for commercial customers, and $0.1240 for government accounts. This component of the CUC bill is different from the fuel adjustment clause rate, which is used to purchase fuel and goes up or down, depending on the price of fuel in the world market.

So far, CHCC has been doing well and has been diligently paying its monthly bill, according to CUC chief financial officer Greg Cruz. He said that CHCC has paid for its September and October power bill, and that CHCC is up to date with their payment, as mandated un an agreement that CUC recently inked with CHCC that became effective last September. “They have kept to their obligation.…They lived up to their obligation…which was $69,000,” said Cruz.

Additionally, he said that the Torres-Palacios administration—as it had promised—kicked in $150,000 that foots part of the monthly bill of CHCC, representing payments for September and October. The administration has not requested an extension of when they will pay the November tranche but, in the CUC-CHCC agreement, it states that payment should be made every eighth of the month.

Under the new agreement that became effective last Sept. 10, the central government will help CHCC pay CUC $219,000 before the eighth of each month. The central government will fork out $150,000; CHCC will foot the remaining $69,000. Under the terms of the agreement, CUC reduced CHCC’s monthly obligation from $250,000 a month to $219,000 a month, which will go toward CHCC’s current monthly bills.

Furthermore, the $219,000 payment will hold unless CHCC’s power consumption increases or there is a rate increase in the fuel adjustment clause. Should there be a decrease in FAC, CHCC will be able to pay less than $69,000, but no less than $60,000.

According to CUC director Gary Camacho CUC is a nonprofit and its funds come from the consumers who do pay their utility bills. Anything gained through the utility fees go to capital improvement projects.

Justine Nauta
Justine Nauta is Saipan Tribune's community and health reporter and has covered a wide range of news beats, including the Northern Marianas College and Commonwealth Health Care Corp. She's currently pursuing a bachelor’s degree in Rehabilitation and Human Services at NMC.

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