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Sunday, April 20, 2014

CUC’s Fletcher says legislative resolution ‘not factually accurate’

Commonwealth Utilities Corp. executive director Alan W. Fletcher told lawmakers that much of the information in a House joint resolution requesting Gov. Eloy S. Inos to relieve him of his duties over claims of “poor record of performance” is “not factually accurate,” and appear to “inappropriately criticize” him and CUC for complying with CNMI and federal laws and Commonwealth Public Utilities Commission’s orders.

Fletcher responded to specific provisions in House Joint Resolution 18-15, including the claim that CUC “has made it a habit to operate without transparency.”

“CUC does operate in an open and transparent manner and is subject to the same scrutiny as all government agencies and political subdivisions. All of the rate proceedings are public, and management has never failed to attend legislative and committee hearings as requested,” Fletcher said in a Feb. 7 letter to House Speaker Joseph Deleon Guerrero (Ind-Saipan) and Senate President Ralph Torres (R-Saipan).

Fletcher said many of the allegations relate to actions that occurred before he became CUC executive director, and “lack substance, fact and reasonableness.”

“More concerning, it appears these allegations were not fully examined prior to the publication of the resolution,” he said.

The resolution claims that the CNMI people “cannot afford the progress at CUC,” to which Fletcher said any operational efficiency that the corporation has gained so far has served to lessen the existing gap between rates and costs.

What this means, he said, is that any efficiency CUC gains in the future will not automatically lower rates. Instead, it will help CUC reach cost recovery without future increases.

Fletcher talked about CUC pursuing new energy sources. CUC currently has two requests for proposals—one for geothermal exploration, and one for integrated resource planning focusing on developing new energy sources for the CNMI.

“The Legislature, both as individual legislators and as the collective voice of the people, has a duty to investigate facts before making public statements or passing resolutions which include information which is demonstrably false,” Fletcher said in his eight-page letter, copies of which were distributed to lawmakers.

HJR 18-15, authored by vice speaker Frank Dela Cruz (Ind-Saipan), was referred to the Public Utilities, Transportation and Communications Committee for review and recommendation. Dela Cruz said yesterday he has yet to fully read Fletcher’s letter.

PUTC Committee chair Lorenzo Deleon Guerrero (Ind-Saipan) said they will thoroughly review the resolution and would call in CUC officials if needed.

Gov. Eloy S. Inos, when sought for comment on Friday, told reporters that if the absence of extreme power outages, for example, reflects on Fletcher’s performance, then “how can that be negative?”

Fletcher asked lawmakers to “look at the facts” he’s providing them in his letter, and make their own determinations.

On the resolution’s claim that “CUC has repeatedly requested and received rate increases which have resulted in CUC being enriched to the point where CUC is benefiting to the detriment [of] the CNMI’s suffering people,” Fletcher said CUC management has a legal and fiduciary responsibility to operate the utility, to recover the costs of operations, and to ensure compliance with CNMI and federal law.

He pointed out that without adequate operating funds, the stability of power, water and wastewater systems will erode.

“While recently we have been successful in providing services, the continued unavailability of funds to allow reinvestment into the utility will increase the chances of again experiencing system failures,” he said.

Fletcher also said most of the CUC decisions mentioned in the resolutions were made prior to him becoming CUC executive director, including purchase of vehicles and 15-year contract extension for Telesource.

As to the resolution’s claim that CUC failed to terminate an employee convicted and found guilty in a court of law for theft of service, Fletcher said the subject employee was not charged by the Office of the Attorney General after an investigation.

The resolution also includes claims of nepotism, which Fletcher said is “false” and “unsubstantiated.”

Fletcher said he and CUC strive for continued successes and to overcome the numerous challenges CUC faces, with customers first and foremost in their minds.

“Following power generation collapse of 2008-2009, together with the requirements of the federal stipulated order, CUC has been working diligently to overhaul the utility by stabilizing finances, replacing dilapidated equipment, and installing new infrastructure. CUC’s customers have seen the successful results of these efforts in more reliable power, water and wastewater services,” he added.

But unfortunately, he said, improvements come with a price tag both in operations and capital funding.

Federal agencies, he added, have been instrumental in providing a significant portion of the funding needed to revitalize CUC. Since 2010, federal agencies have provided CUC over $60 million in grant funding for engine repairs and efficiency-related improvements, rehabilitated wastewater treatment plants, and improved drinking water systems.

“Without these grant funds and successful projects, there would be even more pressure on our ratepayers,” he added.

Fletcher was first hired at CUC in February 2011 as deputy executive director and administrator of the water and wastewater division. He had been at CUC’s helm in an acting capacity since May 2012. Inos later selected Fletcher to serve as CUC executive director, after also passing federal scrutiny.

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