CPUC Vice Chairman Kyle Calebrese said they will meet this week to vote on these proposed changes.
“CPUC will have a business meeting about these recommendations [this] week,” he told the Variety after a presentation in the Senate chamber on Friday.
Except for Rep. Tina Sablan, Ind.-Saipan, no one else made a comment during the hearing.
Calebrese said the commission’s decision will be final now that the public hearing process has been completed.
Larry Gawlik of the Georgetown Consulting Group, which CPUC hired, said the new fuel rate for the power bills of residential consumers will be fixed at 21 cents per kilowatt hour while the nonfuel rate of about 6 cents stays.
The fixed customer service fee will also be retained.
Thus, if CPUC approves the recommendation, residential customers will be charged only 26 cents per kilowatt hour for their electricity from April through September.
“The new LEAC [Levelized Energy Adjustment Cost] deals with fuel rate basically which, of course, is the vast majority of the overall rate structure at CUC. For instance, for residential customers, it will be the equivalent of 21 cents and the base rate component is equal to 6 cents or so,” said Gawlik.
“It fixes for the next six months the fuel component for 21 cents. It won’t change — that’s why it’s called levelized,” he added.
Currently, under the electric fuel rate formula, the power rate is based on how much CUC pays for the imported fuel that runs its power plants.
This electric fuel rate component bill is adjusted every month.
In 2008, consumers paid more than 50 cents per kilowatt hour for their electricity as prices of fuel soared to record highs.
Antonio Muna, CUC executive director, said the cost of fuel continues to fluctuate.
“The cost of fuel seems to be on an upward track. We need to deal with that accordingly and responsibly,” he said.
CUC spends more than $21 million for fuel every six months and sells about 135 million kilowatts of electricity during the period.
Water and wastewater rates
But while charges for electricity will go down, residents and businesses will have to pay more for their water and wastewater services.
Based on Georgetown’s analysis, CUC’s finances are affected by the power division’s subsidizing water and wastewater services.
Under the proposed new rates, all CUC consumers must have water meters.
Thus far, only 40 percent are metered.
But Muna said unmetered customers will soon have theirs through grants that CUC is expecting to receive from the federal government.
Right now, CUC charges each consumer $3 a month for their wastewater service. By April, this will be $5.60.
The new rates for water are still being finalized.
About half of CUC’s consumers pay the fixed monthly rate of $11.
Gawlik said charging consumers for their actual consumption of water will help stabilize CUC’s finances.
“No one will get free services,” he said. “It is a major step forward. It will do a lot to stabilize the financial condition of CUC. And in fact, if CUC does those other things that we talked about today, those revenue enhancements, such as getting their collectibles down from where they are, then CUC should be in a reasonably good shape.”
