Large customers encouraged to review CUC’s incentive rate

The Commonwealth Utilities Corp. is urging large commercial customers to look at the incentive rate and forward their comments or concerns to the utilities company.

In a statement to Saipan Tribune, CUC executive director Alan Fletcher said that the Incentive Rate Rider Contract and an economic benefit statement is now available for review on CUC’s website, www.cucgov.org.

Fletcher said that CUC has worked with the hotel group on Saipan to explore options for large commercial customers that are currently self-generating all or most of their electric requirements.

“CUC would like these customers to purchase all of their electricity from CUC and has developed a new rate to attract these customers onto the system, with the condition that the new rates not cause other customers to pay more for their bills,” Fletcher said.

The result of the incentive rate would apply only to customers who generate 90 percent or more of their annual electrical requirements.

“It would be low enough so that it would be close to self-generating customers’ cost, yet still provide CUC with enough additional revenues to be justified,” he said.

Fletcher acknowledged that going back to the CUC grid is a risk for large commercial customers but hotels have expressed that they would be willing to take that risk.

“A strong utility is a key element to CNMI stability, and will attract and enhance the tourist experience in the CNMI,” he said.

Fletcher noted that other companies that are considering investing in the CNMI will see that almost all of the existing hotels and other large businesses that serve the CNMI’s tourism industry made a choice to purchase from CUC for “rational economic reasons.”

“This sends a strong signal to other new customers to connect to CUC’s grid. In turn, this will provide a more stable base for the CNMI and all its customers,”

Incentive rates are common in the U.S and some are designed to attract new customers while others will keep existing customers from leaving; those that have moved into incentive rate contracts sufficed from the high utility cost they had received before.

Fletcher said that getting this class of customers back to the CUC grid will help “maximize the economic value of surplus generation capacity and economies of scale.”

“CUC is in a similar situation as adding hotels would increase the peak demand. This additional load would work to spread out the fixed cost of operating the system over a larger base of customers,” he said.

The incentive rate for large commercial customers can be viewed at www.cucgov.org under “regulatory matters/ public utilities commission.”

The Commonwealth Public Utilities Commission is also waiting on the commercial customers’ review and is set by the end of the month to make a decision on the incentive rate.