The Commonwealth Utilities Corp. could realize savings of between $6 million and $10 million a year if they brought line losses down to levels comparable to the U.S. mainland\u2014underscoring the need for the CNMI\u2019s struggling public utility to invest directly in some of its $10 million worth of deferred utility repairs and upgrades.<\/p>\n
Last Friday, the CUC board voted to withdraw a 2.1-cent kilowatt hour surcharge pending with the Commonwealth Public Utilities Commission. The plan is that this rate, or the \u201cdebt relief\u201d surcharge, will be replaced with an \u201cinfrastructure improvement\u201d charge, for which an amount or exact name will be finalized in the coming weeks.<\/p>\n
Board member Joe Torres, who motioned for this vote, cited CUC\u2019s 20 percent overall line losses\u2014the energy wasted as power is transmitted along the grid.<\/p>\n
Yesterday, chief financial officer Matthew Yaquinto confirmed that CUC\u2019s line losses are between 18 to 20 percent, adding that, \u201cnormal ranges on the mainland are less than 10 percent and sometimes less than 5 percent.\u201d<\/p>\n
He said CUC will probably not be able to get below 5 percent but can get below 10 percent.<\/p>\n
\u201cIf we get below 10 percent, say to 8 percent, it would be a savings of between $6 [million] to $10 million per year,\u201d he told Saipan Tribune.<\/p>\n
CUC executive director Alan Fletcher separately told Saipan Tribune that they have identified $10 million worth of needed repairs and upgrades to improve distribution efficiency and to cut losses in their power system.<\/p>\n
Fletcher pointed out that CUC actually began with an infrastructure surcharge before it was changed to a debt service surcharge. The previous rate expired at the end of April. Essentially, CUC was aiming to renew a rate already appearing on customer\u2019s bills.<\/p>\n
Fletcher said the purpose of the infrastructure charge would be to accomplish electrical distribution and power related projects that have been deferred over time due to their \u201cliquidity crisis,\u201d or their lack of funds to meet even some short-term obligations.<\/p>\n
While system improvements have been identified in past rate cases, Fletcher said that monies have always been diverted to buying fuel or other system priorities to keep the utility running.<\/p>\n
\u201cAs a result we are sitting on a lot of deferred maintenance,\u201d he said.<\/p>\n
\u201cPast analysis has identified $10 million in needed distribution repairs and upgrades to improve efficiency and cut technical losses. Improvements such as changing out transformers to match current loads, basically right-sizing the system to today’s needs,\u201d he said.<\/p>\n
\u201cAlso, replacing old dilapidated poles, cross-arms, and other hardware that will provide better system reliability during storms and allow speedier recovery,\u201d he said.<\/p>\n
\u201cCutting technical losses would have a payback, helping to better manage fuel costs,\u201d the director said. \u201cHowever, it takes direct investment to make this happen and a targeted surcharge would restrict these funds to these certain projects.\u201d<\/p>\n
He commended the CUC board for this move, but also added that they also have to make sure the utility can continue to operate by ensuring customers pay their bills.<\/p>\n
Right now, CUC is still sitting on over $30 million in receivables. \u201cWhile there appears to be no quick and easy solution to this crisis,\u201d the executive director said, CUC \u201cdesperately needs receive regular monthly payments from its large government accounts to stay afloat.\u201d<\/p>\n
Fletcher was probably referring to the Commonwealth Healthcare Corp., among others.<\/p>\n","protected":false},"excerpt":{"rendered":"
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