The Commonwealth Utilities Corp. eyes a 2.1-cent charge for a planned \u201cinfrastructure improvement\u201d rate that will be reviewed by CUC consultants and board during their meeting today.<\/p>\n
CUC consultants from economists.com are set to present to the board today, according to a copy of the meeting\u2019s agenda.<\/p>\n
Speaking to the board during a meeting last week, consultant Dan Jackson said they would be presenting \u201calternative rate structures\u201d in the wake of the board\u2019s decision to withdraw a debt service surcharge with the Commonwealth Public Utilities Commission, the ongoing negotiations with the Commonwealth Development Authority to impose a moratorium on debt payments, and the recent release of fiscal year 2014 CUC financial statements.<\/p>\n
The decision to withdraw the debt service surcharge petition, eyed at a 2.1-cent per kilowatt charge, was made by the board last month after discussions to improve CUC\u2019s \u201cline losses\u201d and also CPUC\u2019s rejection of this debt rate on \u201cimmediate relief\u201d in May. As for the proposed moratorium, this was detailed in a letter to CDA last month, and the financial statements were shared with the board early last week.<\/p>\n
\u201cGiven the changes that have occurred\u2026We\u2019d like to give the opportunity to present some alternatives for going forward,\u201d Jackson told the board.<\/p>\n
\u201cI would say that the default position right now is that the infrastructure surcharge would be the same as what the debt service surcharge is [2.1 cent per kilowatt hour],\u201d he said, adding that they would like the opportunity to \u201crun the numbers\u201d before the board.<\/p>\n
Jackson said they would talk about the status of their current filings with CPUC are and potential benefits to an infrastructure surcharge.<\/p>\n
He said the question is, \u201cHow do we replace the revenues that we sought to get from the debt service charge?\u201d<\/p>\n
Board chair Adelina Roberto said they are thinking about using the same rate as they had for a \u201cPIMC\u201d rate, which was at 2.1 cent per kilowatt-hour.<\/p>\n
The planned debt service charge was to replace this charge without adding more to CUC\u2019s monthly bills as the 2.1 cents had already been fixed. However, the rate expired at the end of April.<\/p>\n
The CUC board is considering whether to implement the rate on an annual basis or revaluate it every 12 months. Jackson said last week they would be presenting on both alternatives.<\/p>\n
The 2.1-cent charge would allow CUC to collect about $4.5 million a year.<\/p>\n
The originally planned debt service charge was to pay off $4.32 million in deferred to CDA by October 2016. Right now, though, CUC aims for a moratorium on debt payment and interest.<\/p>\n
As for the planned infrastructure rate, CUC has identified $10 million in needed distribution repairs and upgrades to improve efficiency and cut technical losses. These improvement include changing out transformers to match current loads, replacing old dilapidate poles, cross-arms, and other hardware to improve reliability during storms, for example.<\/p>\n
Then-executive director Alan Fletcher told Saipan Tribune last month it would take \u201cdirect investment\u201d to make these improvements and that a targeted surcharge would restrict these funds to these specific projects.<\/p>\n","protected":false},"excerpt":{"rendered":"
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