CUC’s water revenue deficit amounts to $5.99 million and the rate increase should allow the agency to recover its full cost of service, CPUC said.
Its decision dated April 2 was signed by CPUC Chairwoman Viola Alepuyo and Commissioner Kyle Calabrese.
CPUC approved an 81 percent water rate increase but suspended half of it to allow the CNMI government and other entities to identify and tender to CUC funds from alternative sources.
In an interview, CUC acting Executive Director Bruce Megarr said Georgetown Consulting Group and CPUC considered the stimulus package, grants and other federal assistance as well as revenue optimization in its decision to defer the full implementation of the 81 percent rate increase.
Megarr said the government can raise funds as substitute for the suspended rate increase.
The full rate increase will take effect on April 1, 2010.
In their order, Alepuyo and Calabrese stated that rate increase is “just, reasonable, appropriate and necessary.”
“[It] respects the importance of making a reasonable effort to minimize the impact of utility rates on customers during these difficult economic times, particularly when no lifeline rate for low income customers has yet been established,” the order stated.
It added that the rate increase will provide CPUC with “a reasonable period to examine the opportunity for revenue enhancement activities.”
CPUC said the revenues derived from the water rate increase will be used only for CUC water expenditures.
The revenues derived from or corresponding to the suspended 50 percent potion of the rate increase will be used only for expenditures directly related to CUC’s compliance with the federal stipulated orders which require the agency to comply with federal environmental and safety standards.
The current power rate of $0.24589 per kilowatt hour was reduced by three cents starting on April 1.
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