CUC also failed to provide the Commonwealth Public Utilities Commission with two “now over-due quarterly reports,” said the CPUC’s consultant.
“We call to the CPUC’s attention the fact that CUC has not deposited any funds into the required lock-box,” Georgetown stated in its 31-page report on the “Investigation of CUC’s LEAC” dated Aug. 10.
From Jan. 1 to March 30, 2009, CUC’s LEAC billings were estimated to reach $1.7 million, and an additional $3.5 million should be collected for the period of April 1 to Sept. 30, 2009.
Georgetown said it is not aware of the status of the LEAC rate element authorized for the purpose of funding the reserve and support power generation efficiency measures.
The consulting group will not recommend continuing the previous LEAC rate element for funding a reserve.
Based on the CPUC order, those funds should be used by CUC, upon approval by CPUC, for projects that will increase the availability, efficiency and reliability of its generating units to reduce fuel costs, Georgetown said.
But while CUC successfully undertake its rehabilitation efforts at Power Plant 1 by using the third-party funding from the CNMI and the U.S. Department of the Interior, Georgetown said such alternative funding does not relieve CUC from the requirements of the prior CPUC order.
CUC should be prepared to discuss its actions during the upcoming regulatory conference on Aug. 31 in the Senate chamber, Georgetown said.
On Dec. 19, 2008, the CPUC established the LEAC to recover its fuel and other related expenses.
On April 2, 2009, the LEAC rate of $.20147 cents per kwh was posted for the period of April 3 to Sept. 30.
The CPUC then ordered CUC to use specific portions of the LEAC revenue to increase its fuel inventory and to fund a locked box reserve for CPUC authorized generation enhancement activities.
In its April 2009 order, the CPUC directed Georgetown to recommend a LEAC rate for Oct. 1, 2009 to March 30, 2010.
Georgetown submitted its report on Aug. 10 which recommended increasing the current LEAC rate of $.20147 cents per kwh to $.22618 cents per kwh to reflect projected increases in oil prices.
Unaccounted
In its investigation, Georgetown said it discovered that about 20 percent of the energy produced by CUC’s power plant is unaccounted for and is not shown in energy sales to its customers.
Georgetown said the normal utility level of unaccounted for energy should only be in the range of 6 to 7 percent.
“This means that all customers are paying through their LEAC rate a premium of approximately 13 percent. By any standard of measure this level of unaccounted for energy is totally unacceptable.”
According to Georgetown, the energy losses may have resulted from energy that is thermally consumed in the power delivery process, in the metering, meter reading and billing process, or those that were illegally diverted by unscrupulous individuals and businesses.
