The court said CUC’s fuel surcharge from July 22 to Oct. 23, 2006 was illegal because the executive order that merged CUC with another agency was unconstitutional.
On Sept. 28, the Supreme Court ordered CUC to work with the plaintiffs so they could collect the illegal charges during the period.
A class action suit was subsequently filed to benefit other consumers.
CUC Executive Director Antonio Muna yesterday said CUC has no other sources of income, thus, if the Legislature doesn’t appropriate the projected $8.7 million that will be returned to consumers during the period, the corporation will ask the Commonwealth Public Utilities Corp. to increase the power rates.
“We have to raise the money,” he said.
CPUC is the regulatory body of all businesses engaged in telecommunications and utilities in the CNMI.
Muna said CUC never overbilled consumers during the contested period.
He said the fuel surcharge that was collected was used to pay the fuel to run the power plants.
He said a technicality regarding the executive order will now cost CUC $8.7 million.
As a municipal utilities corporation, CUC has no profit margin and surplus.
What it charges customers are barely enough to cover its operations in providing electricity and water to the community, Muna noted.
“This [ruling] is not justified. This will jeopardize CUC’s recovery efforts. This is not just about refunds. This is about raising the money [to pay the consumers]” he said.
CUC records showed that from July to Oct. 2006, actual fuel costs for the corporation reached $19.578 million.
Without the fuel surcharge of 3.5 cents per kilowatt hour, CUC would have recorded a shortfall of at least $6.8 million in fuel costs alone.
In 2006, Torres and his chief of staff Jack Angello challenged Gov. Benigno R. Fitial’s two executive orders merging CUC with the Department of Public Works, dissolving the corporation’s board of directors, and allowing it to adjust power rates.
The two argued that the second executive order illegally restructured CUC because the governor’s alterations were made in excess of his constitutional powers.
CUC held an administrative hearing on their case and partly sided on their contention but the illegal rate issue was dismissed.
The two then appealed their case, which the Superior Court dismissed.
They brought the case to the Supreme Court which said that although the CNMI Constitution empowers the governor to reorganize the executive branch, it does not allow him to create a new entity, agency or department as this power is solely vested in the Legislature.
