It was the Legislature that passed the law allowing CUC to raise its power rates.
Senate President Pete P. Reyes, R-Saipan, said he could not tell whether CUC’s under-recovered cost for February 2008 took into consideration a portion of the agency’s total amount of receivables.
CUC Executive Director Antonio S. Muna earlier said their new power rate factored in the projected cost of fuel/oil in the market for the month of May and its cost recovery for February.
Accordingly, the projected fuel/lube oil cost for May is about $7.5 million and the under recovered cost has a difference of $390,607.
Muna said CUC billed only $5.3 million in February when the actual cost of fuel and lube oil at that particular time was $5.7 million.
“Who’s fault is that?” asked Sen. Maria T. Pangelinan, D-Saipan.
She said CUC has issues with its administrative cost as well.
Pangelinan said she will further review CUC’s rate-setting formula.
For Rep. Tina M. Sablan, who voted against the passage of the law, CUC’s rate begs the question.
“It remains unclear to me,” she said, “not only how the rates for this month were calculated, but also whether or not CUC followed the same rate formula that was adopted in September last year prior to the passage of Public Law 15-94,” or the power rate cut law.
Sablan, Ind.-Saipan, raised the issue of legality and fairness in CUC’s implementation of the 35.7 cents/kwh rate: “By what authority the new rates were established without the approval of the Public Utilities Commission?”
The House member wants CUC to furnish a break down of its new power rate “according to generation transmission, distribution, customer service, administration” and other factors.
Muna earlier stated that due to time constraints, CUC needed to implement a new rate based on the projected and actual cost of fuel and lube oil.
He said in a previous interview that “charging 35.7 cents/kwh is authorized because the rate model is what we call a fluctuating rate with respect to fuel, based on what it cost us to collect.”
