(CUC) — In its ongoing efforts to provide safe, reliable, and sustainable utility services to the people of the CNMI, the Commonwealth Utilities Corporation, along with its consultant, Economists.com, presented its 2025 Cost of Service Rate Study and Long-Term Financial Plan to its Board of Directors during a recent meeting. The study outlines the corporation’s financial realities and the strategic options available to ensure the long-term stability of electric, water, and wastewater services.
For many years, CUC’s utility rates, particularly for wastewater, have been among the lowest in the region. Wastewater charges in the CNMI average just $15 per month, compared to about $50 in the U.S. mainland. While affordability has benefited customers, the current rates do not fully cover the cost of service, making it difficult for CUC to keep up with rising operational costs, aging infrastructure, and inflation.
Without adjustments, CUC faces a potential $30 million shortfall by 2026, making it harder to maintain essential services like power generation, clean water delivery, and wastewater treatment. Upcoming changes in federal support, such as expected reductions in EPA funding for water systems, further highlight the need for a more sustainable financial approach.
A commitment to service and balance
In line with the 1985 Special Representatives Agreement between the CNMI and the U.S. governments, utility systems were intended to operate on a full cost recovery basis. The financial plan upholds this long-standing commitment while aiming to keep any changes manageable for customers.
CUC’s consultants presented three scenarios to update utility rates:
• Scenario 1: A gradual five-year plan to phase in new rates,
• Scenario 2: A one-time adjustment in the first year, or
• Scenario 3: A gradual five-year phased plan that also transitions government accounts to the same rate structure as commercial customers.
The CUC Board approved Scenario 3 as the most balanced approach. It spreads adjustments over time and promotes fairness across all customer groups. Under this plan, the average residential bill (electric, water, and wastewater) is expected to rise from approximately $184 to $218 per month by FY2026. Customers using only electric and water services would see smaller increases, from approximately $170 to $185 per month by FY 2026.
Managing today’s needs, planning for tomorrow
CUC’s Chief Financial Officer Betty Terlaje shared that fuel remains the corporation’s most significant operating expense, and revenue is carefully managed daily to meet these essential needs. While ongoing grants support infrastructure improvements, they cannot be used for daily operations and are often delayed by reimbursement timelines.
In recent years, CUC has also had to manage unexpected costs to maintain reliable service, including the use of temporary power sources during critical times. These challenges highlight the importance of long-term financial planning to ensure reliable utilities for the community.
CUC Board Chairman Allen Perez and Vice Chairman Donald Browne emphasized the need for a responsible and flexible strategy, particularly as CUC continues investing in renewable energy, such as an upcoming solar farm and new power generation facilities, which could help ease costs in the long run.
What’s next
With Scenario 3 now approved by the Board, CUC will move forward with a formal petition to the Commonwealth Public Utilities Commission for review and approval of the proposed rate structure. As required by the CNMI law, CPUC is the authority responsible for setting utility rates. The review and approval process is expected to take several months before implementation may begin.
CUC will continue to provide updates as the process moves forward and remains committed to keeping customers informed every step of the way.
CUC remains committed to transparency, financial responsibility, and ensuring that the people of the CNMI continue to receive safe, reliable, and affordable utility services today and into the future.
For more information regarding the 2025 CUC Cost of Service Rate Study and Long-Term Financial Plan, contact (670) 664-4282 or via email at cucadmin@cucgov.org/, and monitor the CUC website and social media pages for the latest updates.
