By Bryan Manabat
[email protected]
Variety News Staff
THE Commonwealth Utilities Corp. board of directors on Tuesday unanimously authorized management to petition the Commonwealth Public Utilities Commission to implement a six‑month Fuel Adjustment Charge recovery process, allowing additional interim petitions in the event of under‑ or over‑recovery.
The decision followed a presentation from CUC consultants Robert Young and Dan Jackson of Economists.com, who joined the meeting via videoconference. They presented two options: a six‑month FAC rate, or a monthly FAC rate combined with lifting or revising the stabilization order, allowing the utility to adjust the FAC as fuel prices change.
Young recommended a monthly FAC rate, citing the volatility of ultra‑low sulfur diesel or ULSD prices.
“With a six‑month FAC during periods of rapid changes in fuel costs, CUC would need to file emergency petitions to revise the FAC,” he said. “It places severe pressure on cash flow during ULSD price increases and raises public concern during price decreases. Except for Guam and the U.S. Virgin Islands, most Caribbean and Pacific Island utilities use monthly FACs.”
He added that a monthly FAC would better track fuel price changes, be easier to explain to customers, reduce administrative and regulatory costs, ease working capital strain, and reduce the size of FAC true-ups for over‑ or under‑collection.
After further discussion with CUC Executive Director Kevin Watson and Chief Financial Officer Betty Terlaje, the board opted to petition CPUC for a six‑month FAC rate.
Previously, CUC petitioned CPUC to stabilize the FAC rate until a reconciliation conducted by economists.com was completed. CUC had planned to petition CPUC to lift the current stabilization order to better align electricity rates with actual fuel costs and global oil price trends.
The CPUC’s March stabilization order freezes any FAC increases, holding the rate at the January 2025 level of $0.21119 per kilowatt‑hour. The FAC rate for January and February is $0.19706, unchanged since June 2025.
In a separate motion, the board authorized management to petition CPUC to recover $9 million in under‑collection, including costs related to Aggreko rental generation, over a five‑year period. Watson said ratepayers will be billed $0.006 per kilowatt‑hour for the FAC reconciliation rate, which will appear as a separate line item on monthly bills.
Board members present were Chair Allen Perez, Vice Chair Don Browne, Simon Sanchez, Rebecca White, Miranda Manglona, Rosemond Santos‑Sword, and Frank Rabauliman, who joined via videoconference.
On Friday, CPUC will hold a 9:30 a.m. business meeting at its Marianas Business Plaza office in Susupe.
Bryan Manabat was a liberal arts student of Northern Marianas College where he also studied criminal justice. He is the recipient of the NMI Humanities Award as an Outstanding Teacher (Non-Classroom) in 2013, and has worked for the CNMI Motheread/Fatheread Literacy Program as lead facilitator.
