Lower power rates in effect

Friday, October 05, 2007

Senate echoes House action on power rate reduction bill
By Agnes E. DonatoReporter
Customers can expect a drop in their next electric bill, after the Legislature succeeded in enacting a law to reduce power rates for residential consumers.In a session on Rota yesterday, the Senate voted unanimously to override the governor's veto of House Bill 15-246. The House of Representatives did the same thing on Wednesday.A bill rejected by the governor can still become law if two-thirds of each chamber votes to override the veto. In the case of H.B. 15-246, all eight senators present in the Rota session backed passage of the bill. Sen. Maria Frica T. Pangelinan was absent.With the bill now law, the Commonwealth Utilities Corp. will be compelled to reduce residential rates to the levels set by the Legislature. Commercial, government, and other customers will continue to pay the old rates.Under the legislation, households will pay 17.6 cents per kWh for the first 1,000 kWh. This represents the fuel rate, which may fluctuate from month to month depending on the cost of fuel. Before this act, the fuel rate averaged 20 cents per kWh.The fixed non-fuel rates will no longer be charged for the first 1,000 kWh. But for anything over 1,000 kWh, the non-fuel rate will be 44 cents per kWh, plus the 17.6-cent fuel rate. Previously, the non-fuel rate schedule ranged from 1.6 to 12.7 cents per kWh for residential customers.The new law cuts the monthly customer charge from $7.67 to $3.50.Taotao Tano, which lobbied the Legislature to pass the bill, rejoiced at the Senate action. Gregorio Cruz, president of the local citizen group, said he was overjoyed. “It's about time the Legislature did something and delivered their promise to the people. It's probably just because of the coming election, but I hope it is not the case,” he said.On the other hand, the Fitial administration said the rate reduction might backfire in the form of rolling blackouts.“This presents a new crisis for CUC,” press secretary Charles Reyes said. “The bill basically forces CUC to produce and deliver utility service at below cost. That will cause a serious financial problem for the government. We have to look at our options.”The most likely consequence, he said, is the return of power rationing. If this happens, consumers will experience regular power outages lasting two or more hours a day.A lawsuit is another possibility, Reyes said, but it is not the administration's preferred approach because it takes time and resources.“This bill puts us in a bad situation and now we just have to deal with it. The Legislature thought to please the constituents by reducing costs, but the public may not like the consequences either,” he said.In his veto message, Gov. Benigno R. Fitial said the residential rates proposed in the bill would not cover their share of CUC's operating costs. As a result, CUC would experience a shortfall in electric revenues estimated at $7.2 million to $8.4 million.House Minority Leader Arnold I. Palacios, author of House Bill 15-246, said the Legislature would work with the administration in finding funds to subsidize CUC.“In an ideal world, CUC must be self-sustaining. But the reality is, it cannot do that without imposing exorbitant rates on the customers. Now the public is suffering. Hundreds of households have no power service and that's unacceptable. That's why the government has to step in and subsidize CUC. If we have to cut other programs, we'll do it. Like education and healthcare, utility is an essential public service. We have to make it affordable,” said Palacios.In related news, the Senate followed the lead of the Lower House, which had voted to override vetoes of five other bills. The bill extending CUC's bill payment plan to one year is now a law after a 7-1 vote in the Senate. President Joseph M. Mendiola opposed the bill.Mendiola was also alone in voting against H.B. 15-27, which allows employees with 15 years of government service to withdraw their retirement contributions. The measure is now in effect.The Senate also had enough votes to pass H.B. 15-53 granting preference to local contractors bidding for government projects; H.B. 15-229 amending the Chamorro-Carolinian Language Policy Commission Act; and Senate Bill 15-89 offering job protection to volunteer emergency responders.