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House to identify funding for CUC
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Posted on Jul 23 2005
To boost the possibility of repealing the fuel surcharge, the House leadership is making a last-minute move to identify sources of funds for the financially distressed Commonwealth Utilities Corp.
This came about after Gov. Juan N. Babauta threatened to veto House Bill 14-343 next week unless there is a guarantee from the Legislature that appropriations would be made to CUC so it can buy fuel for the next 15 months. H.B. 14-343 seeks to repeal the fuel surcharge law.
The governor said CUC needs $31 million to purchase fuel during the specified period.
House Vice Speaker Timothy P. Villagomez said yesterday that the House leadership has tasked the chamber’s legal department to look in all areas that they can tap for funding.
“The legal counsel is preparing something. It should be ready by Monday. We’re identifying sources of funds,” said Villagomez, adding that the report would be submitted to the Governor’s Office for consideration.
He said such effort is separate from the $20-million appropriation bills offered by House minority bloc member David Apatang.
Apatang authored H.B. 14-360 and H.B. 14-361, which both seek to appropriate $10 million in fiscal year 2005 and another $10 million in FY 2006 to help CUC buy fuel.
The CUC’s board of directors imposed this year a 3.5-cent fuel surcharge per kilowatt-hour amid increases in the price of oil in the world market. CUC said it used to spend $30 million a year on fuel purchase. But this year, the figure went up to $60 million.
CUC sources its fuel from Mobil Oil Marianas.
CUC and Mobil recently signed a two-year fuel supply agreement amounting to $120 million.
As of Thursday, press secretary Pete A. Callaghan said that the governor’s veto of the proposed repeal of the fuel surcharge is “almost certain” for lack of appropriation.
He said the proposed appropriation of $20 million over two years is simply insufficient to address CUC’s needs. Further, he said that the bills do not identify specific sources of money besides the General Fund.
In his previous letter, Babauta asked the Legislature to provide the needed appropriation by July 22.
The governor has up to July 29 to act on the measure.
