CHCC owes CUC over $67M in utility arrears

The Commonwealth Healthcare Corp. is currently struggling to make its utility payments to the Commonwealth Utilities Corp. with its current balance now at over $67 million.

During a regular board meeting last week, CUC chief financial officer Betty Terlaje gave updates on current outstanding accounts, one of them being CHCC’s.

According to Terlaje, CHCC is also struggling to keep their payments going and is currently five months behind on their payments.

As of last week, CHCC owes CUC over $67.1 million; over $35.2 million in principal and over $31.9 million in penalties.

“They haven’t paid since April. Our [previous] memorandum of understanding ended in May but in April they were paying for March or February’s bill. So, they’re short one payment on their MOU and they haven’t paid their bill moving forward. They’re basically behind five months,” she said.

“They’ve aired out that they have vendors that, if they don’t keep up with their payments, they’ll lose some of their special rates that they get and would make their current situation worse. They, like us, provide essential services. This is a predicament between two very critical agencies,” Terlaje added.

Terlaje said CUC has been accommodating but soon, these non-payments have to be collected elsewhere while means the community would be directly impacted.

“While we’re being very understanding and accommodating, it’s going to impact the community because our cost of service will increase because those charges need to be spread out somewhere else because we can’t collect these payments. Unfortunately, that’s the situation. Somone else needs to pay for it if [CHCC] doesn’t pay for it,” she said.

Forunately, Terlaje said CHCC and CUC is working on a settlement in the form of another MOU.

“Hopefully we’ll have a settlement come next week because we’re going to be meeting with CHCC again. Maybe we’ll have an agreement with them by then to see how we can continue moving forward to at least soften the blow we’re feeling from these non-payables. I think the agreement will be similar to the one we had with them before, but the amounts will be different because their usage has increased a little,” she said.

Terlaje adds that she hopes CHCC doesn’t put its utility payments on the backburner.

“We’re hoping we’re able to come to an agreement and that they don’t put us on the backburner again. With EPA’s budget cuts affecting the assistance to our water and wastewater [program], we really have to be serious in collecting everything we need to collect. I’m crossing my fingers that an agreement will push through, but it’s very challenging to get them to commit because they have a lot of obligations too. But I’m pretty sure we’ve made the critical point that just like their pharmaceuticals, we’re an essential service to their operations. Hopefully they will consider that we are also being jeopardized by the non-payments,” Terlaje said.

Terlaje also noted that CHCC’s bill may even drop slightly thanks to the identification of a major leak.

“At the same time, they’ve been working on repairing a leak that they had in their water so maybe that will come down. It’s a good thing they’ve identified that leak. We tried to help them underground, even BECQ assisted them. I’m glad they’ve identified the location and are working on repairing it now,” she said.

CUC executive director Kevin Watson explained that the leak CHCC identified was from their hot water system.

“That also took power to increase the temperature. It was also a major leak. So, that should reduce both water and power costs as well as wastewater,” he said.

Back in 2023, CUC signed an MOU with CHCC in which CHCC agreed to pay $525,000 a month to address over $53 million in utility arrears.

The MOU expired last May and CHCC has been working with CUC to establish a new MOU to address utility arrears.