Commonwealth Utilities Corporation Executive Director Kevin Watson
COMMONWEALTH Utilities Corporation Executive Director Kevin Watson told Variety on Sunday that CUC will continue “to share positive and truthful information in a transparent manner.”
On Nov. 7, 2024, Kannai Komunidat-Payúúr Toulap or Hands of the Community group wrote a letter to Gov. Arnold Palacios, urging him to require CUC to initiate a cost-of-service study in partnership with National Renewable Energy Laboratory “to accurately identify the true cost of providing power, water, and wastewater services to government, commercial, and residential ratepayers in the CNMI.”
Asked about the letter, Watson said “CUC has been working with NREL in a collaborative effort and will continue to do so.”
In a separate letter, the community volunteer group, which is headed by former CUC grant writer Candice Muna, also “strongly” encouraged Palacios to sign Senate Bill 23-37, which would allow the Commonwealth Healthcare Corporation to pay CUC the commercial rate instead of the higher government rate. The bill would also waive all late fees and penalties from fiscal year 2011 to the present.
According to CUC’s previous accounts receivable report, CHCC owed CUC $60.5 million, mostly for water usage and accumulated penalties.
Last year, CUC signed a memorandum of understanding with CHCC, which agreed to pay $525,000 a month. The MOU expired in May 2024. No new MOU has been signed by the two agencies.
On Oct. 31, 2024, the CUC board of directors held a special meeting, and discussed, among other things, the government’s arrears.
“As indicated at the CUC board meeting, CUC has been working with CHCC to help them reduce water consumption by reducing loss by leaks — that has already resulted in a significant reduction,” Watson said.
Asked about the criticism against the Fuel Adjustment Charge, Watson said, “This is due to misinformation being circulated as well as misunderstanding of the rates and how they are imposed.”
Under CNMI law, the Commonwealth Public Utilities Corporation oversees the regulation of public utilities, including electricity, water and wastewater services. CPUC has the authority to set and adjust utility rates based on review and analysis.
CUC is authorized by CPUC to adjust the FAC rate, previously known as Levelized Energy Adjustment Clause or LEAC, depending on the price of oil that CU purchases to run its power plants.
Adjustments are made 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 Fuel Adjustment Charge.
Both CUC and CPUC are governed by boards whose members are gubernatorial appointees and confirmed by lawmakers.
