Rep. Roman Benavente, center background, urges the Commonwealth Utilities Corp. board of directors to find a way to lower utility costs during a meeting on Thursday.
“FUEL rate is a global issue not a utility corporation issue,” acting Commonwealth Utilities Corp. Executive Director Betty Terlaje said in an interview on Thursday.
“The CNMI … is far out in the middle of the ocean and … the transportation of fuel to get here is one of the major costs added to the Fuel Adjustment Charge…. This is factored into the rate so we can continue to buy fuel [for the power plants],” Terlaje added.
She said the FAC rate, which is set monthly, is proposed by CUC and then goes to the Commonwealth Public Utilities Commission. “The rate consultants at CUC and CPUC deliberate on the FAC rate to make sure that it’s a full cost recovery rate,” she added.
“In some cases, we disagree, they disagree, but at the end of the day, CPUC decides what the final FAC rate is going to be. CPUC will either approve a new request, or sometimes they will say you need to charge for this item because it’s not included in the rate. They are doing their due diligence to make sure they are regulating [CUC] correctly,” Terlaje said.
During the CUC board meeting on Thursday, Rep. Roman Benavente asked the board members and management to come up with a way to lower utility costs.
Benavente said a lot of people in the CNMI are “suffering financially,” adding that he has received “a lot of complaints” regarding CUC’s computation of FAC.
“People out there basically want to know exactly what those … charges are. Where do they go?” Benavente asked.
Asked about Benavente’s concern, Terlaje said CUC may conduct a community outreach to help people “understand their utility bills and understand what those charges are.”
CUC is required, pursuant to an order issued by the CPUC, to adjust up or down the FAC rate when the Mean of Platts Singapore monthly pricing equals or exceeds a 4.5% differential of the average per gallon cost of fuel used in the calculation of the current FAC rate.
Due to a decrease in oil prices, FAC went down from $0.30712 per kwh to $0.26690 per kwh effective Dec. 1, 2023.
