Babauta: CPUC and CUC Violate Executive Order in Illegal FAC Rate Hike

Senator Celina R. Babauta is expressing alarm over a blatant disregard for statutory legal protections and the financial survival of local consumers, calling out the Commonwealth Public Utilities Commission (CPUC) for its recent vote to lift the cap on the Commonwealth Utilities Corporation’s (CUC) Fuel Adjustment Charge (FAC).

Senator Celina R. Babauta said, “The decision by the CPUC to allow an increase to the Fuel Adjustment Charge (FAC) during a declared price freeze raises serious legal and ethical concerns. The CUC is not exempt from the law simply because it is a government utility. CUC sells a commodity, electricity and water, which are essential and it impacts every household, every business, and every struggling family in the Commonwealth. If the Executive Order prohibits price increases during a declared emergency or freeze period, then both the CPUC and the CUC must be held accountable for actions that appear to circumvent that order through FAC increases. Calling it an “adjustment” instead of a “rate increase” does not change the reality that consumers are still paying more out of pocket.”

“The CNMI cannot continue down the path of becoming an island where laws are treated as optional. The rule of law must apply equally to everyone, including government corporations and regulatory agencies. If not, then we send a dangerous message that executive orders, statutes, and regulations are meaningless unless they are politically convenient.”

At a time when families are still recovering financially, emotionally and physical from the storm, many without stable income, reliable utilities, or relief from rising living costs, increasing the FAC is not just tone deaf — it is unacceptable.

The Commonwealth Public Utilities Commission (CPUC) voted 3-1 on Friday to lift the cap on the Commonwealth Utilities Corporation’s (CUC) Fuel Adjustment Charge (FAC), nearly doubling the cost of power effective immediately. This regulatory action is a direct, unlawful violation of Executive Order 2026-005, which instituted a strict price freeze on April 11, 2026, immediately prior to the devastation of Typhoon Sinlaku.

Under the Consumer Disaster Price Freeze Act (4 CMC §§ 5141–5144), an executive order carries the full weight of law. Because utility power is a vital commodity sold to the public, both the CPUC and the CUC are operating in direct violation of the law by implementing and enforcing this rate hike during an active emergency declaration. Their decision shifts an immense financial burden onto the citizens of the CNMI at a time when families are struggling to rebuild their homes and lives. By raising the FAC from $0.245 to $0.44489 per kilowatt-hour, the government and its regulatory arms have chosen to protect institutional mismanagement over the legal protections guaranteed to the community.

Raising commodity prices or rental rates while an emergency freeze is active is a felony offense. The law mandates severe personal and corporate consequences including, criminal penalties of up to $10,000 per violation, up to one year of incarceration, or both fines and imprisonment and up to $2,500 per individual civil violation.

“What is even more troubling is the continued lack of enforcement and the absence of consequences for government agencies or entities that choose to ignore the law. When laws are selectively enforced — or worse, ignored entirely — public trust erodes. The people begin to believe there are two systems: one for ordinary citizens and another for government agencies or politically connected entities.”

"What we are witnessing is a complete breakdown of legal safeguards," said Senator Babauta. "An Executive Order is not a suggestion - it carries the full weight of law. By allowing a utility commodity price to double during an active price freeze, the CPUC and CUC have proven that the regulations meant to protect consumers can be bypassed at will. With zero enforcement and zero consequences, the CNMI is effectively operating as an island of lawlessness."

The lack of systemic accountability surrounding this decision sets a dangerous precedent for the Commonwealth. When the very entities tasked with public service and regulatory oversight choose to ignore emergency laws, it signals to the community that the rules no longer apply to them.

“I urgently call upon the Governor, CPUC, CUC leadership, and legal authorities to immediately step in, reverse this unlawful rate hike, enforce the active price freeze to restore the rule of law to the CNMI.”