Georgetown Consulting Group said the Commonwealth Utilities Corp.’s rate increase request “should be offset by several adjustments.”
For example, Georgetown added, CUC should implement a lifeline rate consistent with its own rules and regulations.
“CUC’s current ultra low initial rate block of $0.016 per kwh for all customers does not meet the criterion. We recommend that the lifeline rate for eligible low income customers be kept at $0.016 per kwh and that the rate for all other residential customers be increased to $0.032 per kwh,” Georgetown said.
It also pointed out that there are “11 large commercial customers that self generate and have the privilege of having CUC as their backup energy provider at no standby cost. We do not believe that there is a disagreement with CUC that this is a subsidy that needs to be eliminated.
Implementation of this proposed standby charge would result in test year additional revenues of $574,000.”
These establishments include hotels and resorts.
But CUC’s rate consultant Economists.com said if CPUC adopts Georgetown’s recommendation it will severely jeopardize CUC’s ability to continue to exist as an independent agency.
Economists.com said Georgetown’s recommendations are “based on a combination of flawed assumptions, arbitrary disallowance of legitimate and necessary maintenance expenses, creation of ‘phantom’ unmetered revenues from the water and wastewater division to the electric division, dependence on highly uncertain grant funding, and unilateral elimination of debt service expenses CUC must recover to meet [federal] stipulated order requirements and improve the quality of service.”
Economists.com said if Georgetown’s recommendation is adopted, CUC will be unable to issue any long-term debt before May 2012, and will return to the “bad old days of under-financing repairs and maintenance, which will lead to a reduction in the quality of service and deterioration in the condition of CUC’s major assets.”
CUC will also continue to fail to meet its compliance deadlines under the stipulated order mandates, Economists.com added.
CUC’s proposed monthly increase would amount to about $5.96 for average residential users of 500 kwh.
Those who use 250 kwh per month will pay an additional $4.21 a month. But higher volume residential and commercial users will see greater increases per month.
CPUC will conduct a public hearing regarding the proposed power rate hike today, April 11, at 10 a.m. in the Marianas Public Land Trust conference room on Capital Hill.
