During Saturday’s review hearing of the Commonwealth Public Utilities Commission with Chairwoman Viola Alepuyo presiding, the CPUC approved a new LEAC charge of $0.30791 per kWh for a period continuing until amended.
It was a decrease from $0.34426 per kwh that took effect on April 16.
The new rate is composed of the following elements: fuel and lube oil, $0.28761 per kWh; volatility allowance, $0.01783 per kWh; regulatory/technical support, $0.00247 per kWh.
CUC Deputy Executive Director Alan Fletcher welcomed the decision of the CPUC. He said, “We’re glad that we had action taken on the LEAC in a very tight meeting timeframe.”
On behalf of CUC, Fletcher expressed his gratitude to CPUC, Georgetown and the staff “who worked literally for two weeks straight through the weekend to get to this point.”
“We’re glad the rates are going down and going down immediately,” he said.
On Nov. 14, the Commonwealth Utilities Corp. and Georgetown Consulting Group Inc. submitted the proposed order before the CPUC indicating the proposed decrease in LEAC rate.
In reviewing the proposed order, hearing examiner Harry M. Boertzel said, “The parties recognized that the rate element revenues provided will be used solely for the specific purposes authorized in this order and as discussed in prior LEAC order.”
Boertzel also said there was a finding that the proposed rate was “just” and “necessary.”
The hearing examiner, as indicated in Alepuyo’s ruling, is authorized and directed to oversee CUC and Georgetown’s preparation of the true-up and reconciliation of prior LEAC periods through Sept. 30, 2011 and an appropriate regulatory response to the continuing government receivable problem; the establishment of a new six-month LEAC charge with an effective date of the CPUC’s January 2012 business meeting; a process to manage CUC’s need for a LEAC adjustment during the period that the CPUC may be unable to act for lack of commissioners; and recommendations, strategies and activities by which CUC will minimize back-office or administrative unaccounted for energy losses to a value of no greater than 8 percent.
He also said that it was his understanding that CUC supported the order as it was written.
In her discussion with the representatives of CUC, chairwoman Viola Alepuyo said the government’s and PSS’ delinquent accounts are an ongoing concern for the Commission.
“When we discussed this issue in April, I made it absolutely clear that CUC must address the central government’s delinquent accounts — not just the nonpayment but that there were disconnections happening and reconnections without payments.”
For Alepuyo, “This preferential treatment for government accounts is unfair to the consumers.”
She said, “Instead of addressing the issue, it has gotten worse. Now we have PSS with an even bigger amount than what the CNMI government owes.”
Variety learned that PSS has yet to settle $3.67 million in unpaid bill this year.
Alepuyo told CUC representatives that included chief financial officer Charles Warren, general counsel Deborah Fisher, and Fletcher, that she forecast that the CUC will be dealing with other non-revenue generating autonomous agencies as well.
“Our ratepayers cannot continue to afford to subsidize the CNMI government and everybody else,” She said.
“The Commission is here to regulate the CUC and protect the consumers,” she said.
She told CUC to send her questions or concerns as soon as they came up rather than have these concerns brought before the CPUC meeting.
As for the unsettled government accounts, CUC general counsel Deborah Fisher asked for a timetable for the investigation on the receivables.
For Boertzel, “We already have a basic schedule in place.”
Pertaining to the alarming unsettled accounts, he reiterated, “This is a matter of the highest importance not only to the commission but to the people of the commonwealth.”
The CPUC in April ruled in favor of an increase in LEAC charge, adopting a $0.34426 per kwh, arguing that CPUC and the parties have no control over the price of oil.
The LEAC charge approved in April had the following rate elements: (a) fuel and lube oil, $0.32691; volatility allowance, $0.01635 per kwh; regulatory and technical support, $0.00100 per kWh.
In that April meeting, the parties were in agreement when Alepuyo inquired on the threshold — that in the event “the price of fuel drops so much,” both CUC and Georgetown Consulting will come back to the Commission.
Based on the stipulation jointly signed by CUC and Georgetown Consulting, in the event that Mean of Platts Singapore monthly pricing supplied by Mobil Oil Guam, Inc. to CUC is equal or greater than $3.55 per gallon or if it equals or goes below $3.20 per gallon per month, the parties will jointly petition to adjust LEAC in accordance with market conditions.
