The House of Representatives adopted yesterday a resolution requesting the Commonwealth Public Utilities Commission to order the Commonwealth Utilities Corp. to give back some $800,000 it collected from customers since July 2011 supposedly to repay a planned $10 million loan that did not materialize.
Under the resolution, the $800,000 could be given back to CUC customers through reimbursement or offsetting.
Rep. Frank Dela Cruz (R-Saipan), author of House Resolution 17-105, met at least twice with CUC officials to discuss what CUC intends to do with the additional charges it billed customers since July last year now that the $10 million loan with Rhode Island-based Independence Bank is no longer being pursued.
Dela Cruz is chair of the Saipan and Northern Islands Legislative Delegation's Public Utilities and Infrastructure Committee.
CUC planned to enter into a $10 million loan deal with Independence Bank of East Greenwich to meet federal requirements under the U.S. District Court and U.S. Environmental Protection Agency stipulated orders and enable CUC to buy maintenance parts and equipment for power plant 1.
The money was also eyed to fund 27 other authorized projects, mostly for the repair of engines, power generation equipment, power transmission and distribution.
Public Law 17-62 authorized the $10 million loan, with the U.S. Department of Agriculture as guarantor.
But the loan did not materialize. The administration said it was USDA that pulled the plug on the loan, but Independence Bank said it was the CNMI Office of the Attorney General that did so.
Regardless, CUC has already billed $929,000 toward the debt service but actual collection is estimated at $800,000.
HR 17-105 says CUC chief financial officer Charles Warren advised the Legislature that PUC authorized last year the collection of additional charges from customers. He said CUC would continue collecting until PUC determines they should stop doing so.
Acting CUC executive director Alan Fletcher also told lawmakers CUC is no longer focused only on debt servicing but also addressing CUC's needs to ensure customers get power, water and wastewater service.
House members, in adopting HR 17-105, request PUC to prohibit CUC from continuing to charge ratepayers any sums that were designated for debt service because the intended loan has been cancelled.
“CUC should reimburse or otherwise credit ratepayers and customers any and all sums CUC collected in an amount not less than $929,000 that were billed or collected to repay the planned $10 million loan that did not materialize,” the adopted resolution says.