Guerrero balks at CPUC position on PSS rates

Board of Education chair Herman T. Guerrero is opposed to the Commonwealth Public Utilities Commission’s position that a rate petition must be filed with the regulatory body for a public law to be formally implemented by the utilities corporation.

This comes in the wake of a CPUC letter to the Commonwealth Utilities Corp. clarifying that utility rates set by the Legislature are not exempt from the rate review proceedings of the commission.

The to-do arises from the enactment of Public Law 18-19 in September last year, which mandates CUC to change the water and wastewater rates of public schools from government to commercial. This in effect would lower the utility costs of public schools.

In its letter to CUC, the utility commission said that when the Legislature enacts a rate, a regulated entity should initiate a rate-setting proceeding with CPUC, which would either approve, disapprove, or modify the legislative rate.

BOE’s Guerrero disagrees with this determination, claiming that there’s a need to revisit the CPUC opinion.

“The CPUC as well as the CUC were created by the Legislature. Are they saying that the Legislature doesn’t have the authority on CUC? I think there’s a need to revisit that [CPUC] opinion,” Guerrero told Saipan Tribune.

According to him, with these gray areas in the implementation of P.L. 18-19, the Office of the Attorney General’s legal opinion must be sought.

“Why create another layer of bureaucracy when the action of the Legislature can be construed already an official request? It seems to me that it’s the CPUC opinion that it has greater authority over the Legislature [in this matter]. We have to seek AG’s opinion and interpretation on [P.L. 18-19],” said Guerrero.

He said concerns over the law’s implementation were brought to the table at a recent meeting with Gov. Eloy S. Inos.

“We raised this issue with the governor at one time and he told us to follow the law and that’s what we’re doing. We are not violating the law so we’re disputing any differences [on the CUC billing],” he said.

If parties don’t agree with the OAG’s opinion, another avenue to clear the gray areas is to submit a certified question with the Supreme Court, Guerrero said.

Prior to the enactment of P.L. 18-19, PSS was charged a government rate for its water and wastewater. The law changed this to commercial rate, which reduced by 98.4 percent the charges for its water and 95.6 percent for its wastewater costs.

CUC board chair David J. Sablan, in a statement last week to Saipan Tribune, indicated that CUC is not seeking the OAG’s opinion officially.

“However, in my meeting with the PSS board chairman on May 5, he alluded to an AG’s opinion on allowing PSS to pay the commercial water and wastewater rates [rather than government rates] without CPUC review and approval,” said Sablan.

He added that PSS may have to file a petition with the CPUC for rate review and implementation of that rate. CPUC’s review, he added, will look at whether this reduction in the rate for PSS will have any detrimental effect on CUC meeting its operational needs and requirements under stipulated court orders.