He said fuel prices have declined since the current LEAC rate was established.
However, he added, CUC cannot by law change rates by itself.
“All rates must be approved by the Commonwealth Public Utilities Commission and due to the lack of commissioners, CPUC was not functioning until very recently,” he said.
CUC, he said, submitted proposed legislation, S.B. 17-84, to change LEAC into “MFAC” or Monthly Fuel Adjustment Clause.
The MFAC will be calculated on the first day of every month, he added.
“The Senate approved the bill quickly and we encourage the House to act quickly on this legislation,” Fletcher said.
Fletcher said CUC strongly disputes Georgetown Consulting Inc.’s claim that there has been a material “over recovery” of the LEAC rate.
“CUC asserts that the analysis indicating that an ‘over recovery’ of LEAC revenues is taking place is based on incorrect and unsupportable assumptions,” he said in an email to Variety.
He said CUC continues to analyze LEAC revenues and fuel charges “in this highly volatile market.”
But to date CUC has found no evidence supporting the claim of a material ‘over recovery,’ ” he added.
He said CUC’s LEAC and base rate revenues had been $3.6 million less than its power division’s operating expenses in fiscal year 2011.
“That means that, even if there were an ‘over recovery’ of LEAC revenues, power ratepayers still paid $3.6 million less overall than it cost CUC to provide power service,” he added.
Fletcher said CUC cannot continue to operate if it cannot recover the money it has spent to provide power.
He added that CUC has worked very hard to obtain federal grants so the ratepayers could pay less.
In order for CUC to continue to provide power and meet the requirements of the US Environmental Protection Agency, Fletcher said they must charge customers for the costs of operation.
CUC is cash poor, he said, adding that they have no reserve funds and they routinely experience cash flow problems.
“This has resulted in slow payments to vendors, late paydays, and deferred maintenance to our facilities,” he said.
“It is important to remember that CUC is a non-profit utility. Whether losses are experienced in fuel charges or operating cost, our ability to provide ongoing services to the people of CNMI is jeopardized when we do not recover our operating costs,” he said.
