CUC chief financial officer Charles Warren said the 20 percent drop in volume of kWh sales, the new and higher employer contribution rate adopted by the Retirement Fund and the newly approved amendment to Telesource’s contract affect the base rate.
“We haven’t quantified the rate increase. We need to make up the difference yet. It’s going to be at least 10 percent for base rate,” he said.
Warren said CUC has to pay an additional $1 million in Retirement Fund contributions.
In related news, CPUC yesterday found the amendment to Telesource’s contract as necessary, prudent and cost-beneficial.
This was contrary to the findings presented by the consultants of CPUC and CUC.
CPUC lone member and Chairwoman Viola Alepuyo said she was approving Telesource’s “Change Order No. 5 and CUC will have an opportunity to present in January the addition in the base rate.”
She also approved Commonwealth Utilities Corp. general counsel Deborah Fisher’s request that the terms of the contract would take full force and effect upon the approval of CUC’s base rate increase petition.
In a teleconference call, consultants Georgetown Consulting and Economists.com, reiterated that approving the amended contract for Telesource would double CUC’s cost.
According to CUC’s analysis, the change order’s impact for the first year is $1.53 million and this will reach $30.259 million over a 15-year period.
Georgetown Consulting’s analysis placed the figure at $1.57 million in the first year and $32.638 million for the 15-year impact.
But according to Alepuyo, the change order “was necessary in order to continue to provide utilities to the people of Tinian.”
Telesource runs the CUC power plant on Tinian.
The amended contract eliminates Telesource’s responsibility for the cost of oil and transfers it to CUC.
Its current contract with CUC ends in March 2020.
