EPA wants CUC to pay over $160K in penalties

The U.S. Environmental Protection Agency has slapped the Commonwealth Utilities Corp. with over $160,000 in penalties for failing to fill critical vacant positions.

In a letter to acting CUC executive director Betty Terlaje last week, EPA-Enforcement and Compliance Assurance Division director Amy C. Miller-Bowen said EPA is demanding that CUC pay $162,000 in penalties for failing to timely fill critical vacant positions such as the executive director and the chief financial officer positions.

The letter was filed with the U.S. District Court for the NMI as part of a status report in a pending federal case involving CUC.

Regarding both vacancies, Miller-Bowen said CUC was required to fill the positions within 150 days of the date of the vacancy. The position of executive director became vacant on Feb. 22, 2023, while the chief financial officer position became vacant on May, 21, 2023.

Currently, the CFO position remains vacant and the current position of acting executive director—which Terlaje occupies—does not provide her with sufficient authority to implement major changes or make significant decisions.

“These are critical positions that impact CUC’s compliance with the substantive requirements of Stipulated Orders 1 and 2. It is critical for CUC to have a financial plan and master plan, as required by SO1, to scope out and solidify its financial future. Without an executive director or CFO, however, EPA does not believe progress on these plans will occur. Federal court intervention may be necessary to ensure compliance,” she said.

Miller-Bowen said SO1 authorizes penalties for violations of the requirement to fill vacancies within 150 days in the amount of $1,000 per day for the first 30 days, $2,000 per day for the next 30 days, and $5,000 for each day thereafter.

“Stipulated penalties accruing through Feb. 28, 2024, for the violations regarding the executive director and chief financial officer amount to $1,355,000. We are willing to compromise the accrued stipulated penalties and are officially demanding payment of $162,600 (12% of the accrued penalties) for failure to fill the executive director and CFO positions through Feb. 28, 2024,” she said.

However, Miller-Bowen noted that the penalties will continue to accrue at an increased rate if the vacancies are not filled by the end of February.

CUC must pay this amount no later than 30 days after CUC’s receipt of the letter or officially send EPA a notice of dispute.

Miller-Bowen explained that EPA already wrote CUC last Sept. 12, 2023, to express concerns over its inability to fill critical positions in a timely manner.

“At that time, CUC had vacancies for four SO1 positions. EPA expressed concerns regarding CUC’s delayed response for contacting qualified applicants; CUC’s slow timelines for submitting résumés to EPA for approval; the lack of CUC’s distribution of vacancy announcements; and concerns regarding insufficient offering of salaries and moving expenses. On Oct. 19, 2023, the EPA program official responsible for SO1 compliance issues made an in-person presentation to the CUC board of directors in which he emphasized the chronic issues with vacancies and the lack of response to EPA’s September letter,” she said.

Miller-Bowen noted that EPA has never received a formal response from CUC regarding the concerns raised in the September letter.

Then, on Oct. 27, 2023, Miller-Bowen said EPA followed up with a letter of concern to the CUC board.

Since the September letter, CUC has filled only one of the vacancies—the position of drinking water and wastewater division manager.