By Bryan Manabat
bryan@mvariety.com
Variety News Staff
THE Commonwealth Utilities Corporation plans to petition the Commonwealth Public Utilities Commission to lift the current Fuel Adjustment Charge stabilization order in an effort to better align electricity rates with actual fuel costs and global oil price trends.
The CPUC order, issued in March, freezes any increases to the FAC, holding the rate at the January 2025 level of 21.119 cents per kilowatt-hour. Because of that order, the FAC rate through January 2026 remains unchanged.
According to CUC consultants Robert Young and Dan Jackson of Economists.com, the stabilization order has limited the utility’s ability to adjust the FAC either upward or downward as fuel prices fluctuate. Earlier, CUC petitioned the CPUC to stabilize the FAC rate until a reconciliation — conducted by Economists.com — was completed.
In a presentation to the CUC board members on Jan. 8, the consultants said a recent 13‑year review of FAC data shows the utility has under-collected approximately $9 million in fuel costs, creating long-term financial pressure.
“As it stands, we’re basically $9 million in the hole on a billed basis,” Young said. “If we were to recover it in one year, it would result in about a three‑cents-per-kilowatt-hour increase in rates. Because the under‑recovery spans 13 years, CPUC would likely spread the recovery over three to five years.”
Young added that CUC’s total fuel-related costs — including items such as Aggreko rental generation and bad debt tied to fuel — total about $772 million, while FAC charges billed to customers over the same period amounted to about $763 million.
CUC is also asking that the FAC reconciliation include an estimated $25 million in Aggreko rental-generation costs, which the consultants say should be recognized as part of the utility’s fuel-related expenses.
Projected impact on ratepayers
Based on the consultants’ analysis, recovery of the $9 million under-collection would have the following estimated impacts on customer bills:
• Recovered in one year: about 3 cents per kWh added to bills
• Recovered over three years: roughly 1 cent per kWh
• Recovered over five years: roughly 0.6 cents per kWh
The consultants recommended that CUC petition the CPUC to lift or revise the stabilization order so the utility can adjust the FAC both up and down as fuel prices change. They also recommended CPUC approval of a 13‑year FAC reconciliation that recognizes the $9 million under-collection and the additional Aggreko-related costs.
CUC also plans to petition the CPUC to adopt a forward-looking FAC mechanism that sets rates for six-month periods using projected fuel prices rather than relying solely on past monthly data. The petition would also request approval for a temporary, phased surcharge to gradually recover the historical shortfall without sudden spikes in customer bills.
The five elements included in CUC’s FAC rate are the fuel and lube oil rate, reconciliation rate, volatility rate, regulatory and technical support rate, and the allowance for doubtful accounts rate. The first updated FAC rate is expected to cover roughly March 1 to Sept. 1, pending CPUC review and approval.
CUC officials say the changes are critical to protecting the long-term financial stability of the utility while balancing fairness to customers. “The goal is to match fuel costs more accurately while giving customers predictability and avoiding large one-time increases,” officials said.
The Mean of Platts Singapore, or MOPS, represents the average of Singapore-based oil product price assessments published by Platts, a division of S&P Global, and is a key indicator used in regional fuel pricing. The current January 2026 price for SGX Platts Singapore Fuel Oil 380cst is $329.38 per metric ton, down from more than $340 last month.
Bryan Manabat was a liberal arts student of Northern Marianas College where he also studied criminal justice. He is the recipient of the NMI Humanities Award as an Outstanding Teacher (Non-Classroom) in 2013, and has worked for the CNMI Motheread/Fatheread Literacy Program as lead facilitator.
