Commonwealth Utilities Corp. board chair Allen Perez pushed back against mounting criticism over a proposed Fuel Adjustment Charge increase, saying the utility has no choice but to act as fuel costs surge and daily expenses climb.
Speaking during the CUC board meeting last April 9 at the utility company’s office in Dandan, Perez responded to pointed remarks from private citizen Del Benson and Rep. Vince Aldan, both of whom questioned the agency’s financial management and opposed raising rates on already burdened consumers.
Perez rejected the characterization of CUC as indifferent to ratepayers, noting that officials themselves shoulder the same costs.
“Why do people think that for some reason CUC is this villain, this monster that we want to go out there and hurt our people? … We pay the same rates. Our family pays the same rates,” Perez said.
The exchange came as CUC officials laid out the urgency behind the proposed FAC increase, driven largely by a sharp spike in fuel costs. According to the utility, monthly fuel expenses have doubled from about $4 million to $8 million, translating to roughly $140,000 in additional costs per day.
CUC chief financial officer Betty Terlaje said the agency needs immediate liquidity to secure fuel shipments and keep generators running, warning that delays in adjusting the FAC could jeopardize operations.
Executive director Kevin Watson echoed that concern, saying the utility cannot risk supply disruptions in a system already under strain, particularly as global fuel prices remain volatile.
“We cannot risk any disruption in fuel supply. The system is already under strain, and with prices still volatile, we have to act to ensure continuity of service,” Watson said.
Perez said a roughly $4-million monthly spike in fuel costs is driving the crisis, with CUC seeking authority to borrow funds and pledging to do everything possible to reduce costs, as Terlaje warned load shedding, cutting hours, or other stopgap measures are not viable solutions.
During public comment, Benson questioned CUC’s accountability structure and the lack of meaningful public engagement in decision-making.
“My big first question is, who is CUC accountable to? Who are the stakeholders? I don’t think the public feels at all that they’re stakeholders, because we really don’t have any input and involvement in discussion,” Benson said. “Where are the audits, and where is the financial accountability to justify? … Is CUC doing the same, where they’re looking at where do we reduce our expenses if we’re going to start raising rates?”
Benson added that while global fuel costs are a factor, the utility should avoid reacting too quickly to temporary price spikes.
“I understand, with what’s going on in the Middle East and the cost of fuel, there’s going to be a hit there. But if we sometimes rush too quick, the bump is gone, and then we can stabilize,” he said.
Aldan, chairman of the House Standing Committee on Transportation and Infrastructure, amplified that criticism, cautioning that raising rates without first implementing cost-cutting measures could damage CUC’s standing, especially if it later seeks federal assistance.
“I would love to see the reaction of the federal government when the Washington representative is going to ask for a bailout, because if it was me that you’re asking for a bailout, and I know that you are millions of dollars in arrears, I would not support that. So, thank you for your time, and I really do hope that we do cost-cutting measures before we start increasing the FAC. The people cannot afford it. Even your own employees can’t afford it,” Aldan said.
Sen. Corina Magofna, meanwhile, urged the board to delay any rate increase, citing easing oil prices and ongoing efforts to secure alternative funding.
“I ask that while we receive news updates from the U.S. as to the two-week ceasefire, and we’ve already seen some price decrease in the oil prices from $109 to, I think, $76 as of this morning, I respectfully ask and urge the board to take some time and hold off on increasing the rate as the Senate and the administration… work together to find funding sources to assist CUC with the purchase of the fuel,” Magofna said.
Despite the criticism, CUC board member Simon Sanchez backed the need for immediate action, saying the rising cost of fuel leaves the board with limited options if it is to maintain reliable service.
Commonwealth Public Utilities Commission chair James Sirok said the commission is prepared to work with CUC on its petition to increase the Fuel Adjustment Charge from 0.25 cents to 0.44 cents.
He also weighed in during the broader discussion on the FAC rate hike, underscoring the delicate balance between financial sustainability and consumer protection.
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