CUC now a division under DPW

Beginning today, the Commonwealth Utilities Corp. ceases to be an autonomous agency and is now integrated as a division under the Department of Public Works.

Gov. Benigno Fitial’s first executive order that sought to reorganize the CUC takes effect today, 60 days after promulgation and transmission to the Legislature.

The administration-controlled Legislature did not act on the governor’s executive order, effectively giving its implied approval to the directive, explained CNMI press secretary Charles Reyes, Jr.

With the integration of CUC into the Public Works Department, the administration sees no need to extend the governor’s declaration that placed CUC under a state of emergency, which resulted in the suspension of the CUC board’s powers.

Fitial took control of CUC after the agency’s board members refused to vacate their posts amid calls for courtesy resignation when the new administration took office last January.

Among the CUC’s board members, only Joe Torres, the chairman of the Fitial’s administration’s transition committee for the agency, resigned from his post, while Herman Sablan vacated his seat before the new administration took office.

Those who refused to step down from the board included board chair Frank Guerrero, and members Alan Perez, Laura Manglona, and Rufina Miles.

Fitial, however, declared the emergency based on CUC’s inability to sustain power generation, as the CUC experienced financial difficulty in purchasing fuel to sustain its power plants’ operations.

Reyes justified Fitial’s emergency declaration and differentiated it from a similar move by then Gov. Juan N. Babauta, saying that the former governor recognized the inability of that board to handle the power crisis.

He said the Fitial government did not have the opportunity to appoint a new board for the defunct CUC due to its members’ refusal to heed the call for resignation. “If we can appoint our own board, that could have made a difference,” Reyes said.

Fitial issued Executive Order No. 2006-1 on Jan. 27, 2006 and transmitted a copy of the document to the Legislature on the same day. It takes effect 60 days after submission to the Legislature, “unless specifically modified or disapproved by a majority of the members of each house of the Legislature.” Both houses had no action on the executive order.

The executive order abolishes the CUC board and transfers its functions to the DPW. It will be headed by a chief executive officer rather than an executive director. The CEO will have the rank of division director.

The executive order also tasks the governor’s special assistant for management and budget, special assistant for administration, and the personnel director to consult with each other regarding the integration of the CUC personnel into the new DPW division.

“Pending the integration of personnel…their terms of employment with the abolished agency shall continue to apply to the extent permitted by law,” states the executive order.

It also tasks the governor’s special assistant for management and budget to determine, subject to the governor’s approval, the transfer of unexpended funds from the defunct CUC into the DPW.

“In the transfer of such funds, an amount may be included for the liquidation of obligations incurred prior to the transfer. Any portion of such balances not so transferred may be reprogrammed by the governor,” adds the executive order.

In issuing the executive order, Fitial cited his constitutional authority to make changes in the allocation of offices, agencies, and instrumentalities of the government. He said the move was necessary for efficient administration.

Since last year, the CNMI government has been giving money to CUC so it could buy fuel to sustain power generation. Funds given by the CNMI government to CUC have exceeded $15 million.

CUC has been suffering from a cash flow problem, despite its average monthly collection of $6 million. The monthly collections include fuel surcharge on top of the cost of customers’ power consumption.