Government’s unpaid bills taking toll on CUC

The government’s failure to settle its $12 million debt to the Commonwealth Utilities Corporation is beginning to pinch the autonomous agency as officials yesterday expressed fear over its impact on their financial condition.

Board Chair Jesus T. Guerrero issued anew his appeal to the Tenorio administration to begin payment of its CUC obligations in light of the recent financial report that showed slimming margin between expenses and revenues of the government-owned utility corporation.

While rising fuel price has increased its operational costs, CUC largely blamed the financial strains to failure by the government to pay the overdue billings that have incurred since the last quarter of 1997.

Mr. Guerrero said a payment schedule has to be made now to prevent serious cash problems in the next few months, noting that the offer of Finance Sec. Lucy DLG Nielsen to remit $250,000 per quarter is not going to substantially cut the debt.

CUC Executive Director Timothy P. Villagomez echoed his sentiment as he cited continuing negotiations with finance officials to come into an agreement.

“We need to inform the governor again that we need to try to address this area because the last thing we need is to knock on the Legislature’s door requesting for some doleouts,” he told reporters in an interview after a board meeting yesterday.

Gov. Pedro P. Tenorio has repeatedly extended his commitment to pay the mounting utilities debt, despite a stalemate between CUC and the Department of Finance in the negotiations that began late last year when the unpaid bills reached $9 million.

At present, the figure stands at $12 million, although DOF remitted $200,000 early last month to partly retire the outstanding accounts.

Payment has been erratic, due partly to the financial difficulties that have been confronting the CNMI for the past three years. Since October 1999, it has managed to pay a total of $5.5 million — payment that Mr. Villagomez said covered overdue more than two years ago.

CUC will insist on its proposal to the administration cut at least half of the debt before agreeing on a $250,000 quarterly payment, added the executive director, in order to bring down the total arrears to less than $10 million.

Such a huge uncollected revenues “will certainly hamper some of the operations” of CUC like power, water and wastewater services, he said.

The government is the biggest single customer of CUC, with power, waste and waste water bills running up to more than $1 million each month.

Although the governor has implemented energy-saving measures to cut utilities costs in response to Mr. Guerrero’s plea last May, there has no marked decrease yet in government billings.

“Even if we have conservation, billing comes with it. You just have to make minimum payment,” Mr. Villagomez explained. “I do not have the heart to sit down here, knowing fully well that there’s $12 million debt out there that has not been collected.”

He expressed hope that any surplus funds from the FY 2000 budget could be appropriated to pay CUC, saying that projects drawn up by the utility corporation are likely to be affected by the financial problem.

“We need to be aggressive in making sure that everybody makes payment because it doesn’t go into our pockets. It goes back into making sure that services are improved,” he said.