Some members of the business community believe that it is unfair for the Commonwealth Utilities Corp. to allow only the commercial and government accounts to bear the brunt of providing additional revenue for the utilities company\u2019s non-grant capital improvement projects should it be approved by the Commonwealth Public Utilities Commission.<\/p>\n
Last week, majority of the CUC board of directors approved for a surcharge to be included in their rate case application to CPUC which will allow CUC to have $2.6 million a year\u2014or $5.2 million in two years, as opposed to every year as CUC management identified as their need\u2014for their non-grant capital improvement projects.<\/p>\n
The board approved that this surcharge will only be applied to commercial and government accounts instead of applying it across all ratepayers as recommended by their consultant, Economists.com.<\/p>\n
Because only 65 percent of CUC\u2019s customers will shoulder the surcharge, it was said to be about $0.025 per kilowatt hour. Added to this is a $0.015 surcharge that will be applied to all ratepayers for typhoon recovery that the board approved in a separate motion, bringing the proposed surcharge for commercial and government accounts to around $0.04 per kilowatt hour. <\/p>\n
The surcharges are deemed \u201cinvestment of savings\u201d by Economists.com as the overall rates will still be lower than they were two years ago because of the current low prices of fuel despite the additions\u2014and some more that CUC can decide to fund to improve its facilities and financial health.<\/p>\n
The CUC board was warned that they if they don\u2019t do something with their cash flows, they will run out of money by October that would possibly affect their operations.<\/p>\n
For Saipan Chamber of Commerce president Velma Palacios, the rate adjustment would have a significant impact on the operations of businesses.<\/p>\n
\u201cThis rate application if approved will have a significant impact on the cost of operating a business in the CNMI.\u00a0 A majority in the small business community are already struggling operationally with the existing high utility rates. \u00a0In fact some small businesses may shut down from the pressures of remaining competitive, and this opinion is backed by CUCs consultant, Economists.com,\u201d Palacios said.<\/p>\n
She added that the costs will more likely be passed on to consumers\u2014possibly affecting even those ratepayers that some of the CUC board members are trying to protect from increases.<\/p>\n
\u201cAs the cost of business goes up, so too will the cost to consumers,\u201d<\/p>\n
Business owner Glen Hunter echoed the sentiment.<\/p>\n
\u201cNo matter what, at the end of the day, whenever you have those types of costs, with businesses, most of the time, they\u2019ll pass it forward. So they are still impacting the ratepayers and the private sector no matter what,\u201d Hunter said.<\/p>\n
Palacios added that CUC may be able to find a better solution for all their consumers.<\/p>\n
\u201cThis proposed rate hike may be better served if revisited by CUC to find a more equitable solution for all utility consumers.\u00a0 The Saipan Chamber of Commerce will support a rate hike provided it will directly and immediately benefit the improvement and reliability of CUCs infrastructure,\u201d Palacios said.<\/p>\n
\u2018Unconscionable\u2019<\/strong><\/p>\n Although they understood the need for CUC to have more revenue, for the surcharge to be shouldered only by a certain rate class was seen as unreasonable.<\/p>\n \u201cI think, collectively, rates need to go up to upgrade these systems if they\u2019re not entirely subsidized by the government. If we want good utilities then we\u2019re going to have to pay for good utilities. It is unfortunate that our system in dilapidated in the condition that it is in but if we all want to have 24-hour water, 24-hour power, and 24-hour sewer, the populous has to pay for it,\u201d business leader Alex Sablan said. <\/p>\n He added that it is not fair because the infrastructure projects will only be \u201cband aid approaches to fixing the overall system.\u201d<\/p>\n \u201cTo continue to require the businesses to bear the brunt of infrastructure cost to a system that\u2019s falling apart is really unconscionable, I think. They really need to look at fixing it right the first time and finding the means to do so instead of this band aid approach to do so,\u201d Sablan said.<\/p>\n \u201cThe overall system needs an overhaul,\u201d Sablan added, \u201cI think it\u2019s inherently unfair for the amount of money that\u2019s being proposed to go into systems that are not necessarily going to fix the overall.\u201d <\/p>\n Hunter said the surcharge will be adding insult to injury as businesses were also impacted by the storm but unlike the government as well as most residents, those in the private industry weren\u2019t given any type of relief and recovery assistance.<\/p>\n \u201cIts adding insult to injury, I\u2019d like to say that. We were all negatively impacted by the storm,\u201d Hunter said, \u201cWe\u2019re all dealing with costs associated with that especially businesses. We\u2019re not given any assistance by the local and federal government.\u201d<\/p>\n Hunter\u2019s restaurant, The Shack, was closed for six months after the Typhoon Soudelor. He was only able to get power back to their place late November.<\/p>\n Hunter said the need for the additional revenue stems from \u201cpoor oversight to properly deal with the infrastructure.\u201d<\/p>\n \u201cWe\u2019re all aware that this government is in dire need of revenue generation because they\u2019re unable to cost save,\u201d Hunter said.<\/p>\n He noted that no savings or budget cuts especially on travel expenses were put into place to help fund what the government needs for its share of recovery expenses.<\/p>\n Alternatives, innovative ways<\/strong><\/p>\n Voicing out alternatives, Sablan said CUC could look into putting in place a cooperative where companies can invest to CUC and in turn can be part of a revenue scheme. <\/p>\n \u201cI think it\u2019s time for CUC to look at innovative ways. And one of those is to get a coop situated,\u201d Sablan said, \u201cI think there\u2019s an opportunity as a coop where large, private businesses can come in and provide good portion of the money needed to put infrastructure in but they should be part of the revenue scheme, if you will. There should be payback provision within the coop.\u201d<\/p>\n Sablan believes this is a win-win situation because \u201cCUC could resolve a lot of its problems, the larger developers would have the infrastructure in place needed to allow them to develop, and the community wins in large because now they have an upgraded system.\u201d<\/p>\n For Hunter, a simple solution is to add more revenue to the government is to pass a casino tax. <\/p>\n \u201cIt\u2019s just sad for the government to turn around and surcharge us for any amount of the damage cost to the government by the storm. It\u2019s just disgusting. They need to learn to watch what they spend and redirect that to those new costs. Simple fix, tax the casino and save everyone the hardship,\u201d Hunter said. <\/p>\n \u201cIf they\u2019re looking for a revenue source, they need to stop looking at the pockets of the victims of Soudelor. They need to start looking at, they went ahead to pass the casino, make it work then. Tax it properly,\u201d he added.<\/p>\n","protected":false},"excerpt":{"rendered":" Some members of the business community believe that it is unfair for the Commonwealth Utilities…<\/p>\n","protected":false},"author":51,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[900],"tags":[56,256,49,244],"class_list":["post-221467","post","type-post","status-publish","format-standard","hentry","category-featured","tag-business-3","tag-casino","tag-cuc","tag-utility"],"_links":{"self":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts\/221467","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/users\/51"}],"replies":[{"embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/comments?post=221467"}],"version-history":[{"count":0,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts\/221467\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/media?parent=221467"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/categories?post=221467"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/tags?post=221467"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}