CUC board OK’s surcharge for commercial, govt accounts

The Commonwealth Utilities Corp. board and management continued discussing yesterday with their consultants the adjustment to their rates for the application they will file to the Commonwealth Public Utilities Commission. The board approved yesterday a surcharge for commercial and government accounts, while another surcharge for all ratepayers was approved on Wednesday. (Frauleine Villanueva-Dizon)

Commercial and government customers of the Commonwealth Utilities Corp. will be shouldering the needed funds for the utility company’s capital improvement projects, should it be approved by the Commonwealth Public Utilities Commission.

As the board reconvened yesterday, the majority of the CUC board of directors approved to include in its rate case application a surcharge that would fund—albeit partly—the needed capital improvement projects.

The surcharge would help them collect $5.2 million in two years—or $2.6 million a year—as opposed to what CUC management and consultant Economists.com earlier identified that CUC needs $5.2 million every year to improve its quality of service.

Director Joe Torres motioned for the board to approve to include in their commercial and government accounts only, a surcharge that would get $5.2 million over a two-year period.

Chair Adelina Roberto, vice chair Eric San Nicolas, and directors Albert Taitano and Ignacio Perez who were present at the meeting voted yes. Directors Dave Sablan and Chris Concepcion were absent from the meeting.

Prior to the casting of votes, San Nicolas raised a “concern” for Concepcion who wasn’t there.

“I know, colleague Concepcion is probably going to go against this,” San Nicolas said, “What I’m saying is, because, it’s at the commercial so that includes his company.”

Initially, Economists.com recommended to the board to add a $0.027 per kWh surcharge to all its customers to have $5,219,265 for non grant-funded capital project requirement in a year.

However, the board did not heed the recommendation, as they did not want the residential customers—the 35 percent of its customers—to shoulder the improvement projects.

Because of this however, a significant increase will be made to the bill of commercial and government accounts.

No exact surcharge figure was given yesterday, but since only 65 percent of CUC’s customer will be paying for it, it was said to go high.

Adding on to this is a $0.015 surcharge for all customers that the board approved on Wednesday for the $3 million it needs for disaster recovery.

CUC’s rate consultants and director Sablan earlier warned other board members of burdening other accounts in favor of and somehow subsidize the other rate-paying class.

The high rate, Economists.com said, could result to forcing some people to go out of business.

“You don’t want to charge the commercial and government accounts more, then keep the residential rates where they are. You are to create a very strong protest from our commercial accounts,” Sablan said during the Wednesday meeting.

As the board also moved on Wednesday to withdraw their April 2015 rate case application that sets a uniform rate of $0.069 to all residential customers, their per kilowatt hour charges will stay on its current rates—a move different from their consultant’s recommendation.

As the only two surcharges were approved to be included in their rate case application that will be submitted in March, it is not clear what will happen to CUC’s other needs such as $1.5 million to recover from the settlement agreement with the Commonwealth Healthcare Corp. and increase in bad debts and the $1.2 million debt payment to the CDA.

Sablan earlier expressed that the board need to address these items, particularly the debt to CDA, so that they could improve their credit status and be able to be approved for better loans in the future should a need arise.

During the meeting, chief financial officer Matt Yaquinto also expressed that the Federal Emergency Management Agency is looking at what CUC is doing to improve its own system in order to get additional funding such as 100 percent reimbursement and other mitigation projects.

As the discussion for one surcharge item lasted almost five hours, the board will again have a special meeting that is initially set on a Saturday, Feb. 27, to discuss other matters on their agenda.

This would be the board’s fourth meeting this month, including a personnel and operations committee meeting held earlier this week where at least five members of the board were present.