According to CUC’s rate consultant Economist.com:
• Rates must be adjusted to reflect the significant decrease in billed usage and accounts experienced by CUC over the past several months.
• Salaries and benefits expenses must be adjusted to reflect a substantial increase of approximately 62.8 percent in retirement fund contributions required from CUC in the coming year.
• The cost of service must be adjusted to reflect an increase resulting from CUC’s agreement to reimburse the Commonwealth Development Authority for dividend payments beginning in 2012.
• The cost of service must be increased to account for additional expenses resulting from the Commonwealth Public Utilities Commission’s adoption of Telesource Change Order #5.
“This petition seeks to adjust rates to ensure that CUC can fund these additional liabilities,” the consultant said.
It added, “CUC recognizes that this is a very difficult request to make of the CPUC and the ratepayers of the CNMI. After all, it is never easy to ask ratepayers to pay more for any utility service.”
The consultant said CUC “knows full well the implications of, and the impact of, this rate application on the citizens of the CNMI. CUC only decided to request this new electric base rate adjustment after concluding that there was simply no other alternative to the application being presented to the CPUC.”
Economist.com said the proposed rate will impact ratepayer monthly bills in various customer classes and usage levels.
Because the average residential ratepayer uses between 250 and 500 kWh per month, the rate proposal’s impact on the average residential ratepayer will result in an increase in monthly charges by $4.87 to $6.87, the consultant said.
On Nov. 10, CUC submitted an application to adjust its electric base rates, citing several reasons for the proposed increase, including the increased operating costs, capital spending needs and stipulated order requirements.
From Dec. 2010 to March 2011 CUC amended its testimony three times to account for various changes to its revenue requirements.
In April 2011, CUC and CPUC met for several days and developed a stipulation that allowed for an approximate $3.8 million increase in CUC’s base electric rates.
