CUC denies overcharging gov’t

The Commonwealth Utilities Corp. yesterday brushed aside claims by the Office of the Public Auditor of overcharging the cash-strapped government for its water supply, saying it has been lenient to departments and agencies that exceed allowable consumption.

But the utility firm is seriously looking into lowering the power rate for the government as part of the austerity plans of the current administration, according to CUC information officer Pamela Mathis.

She said the Board of Directors has yet to consider the option for the government water rate which, according to OPA, is 60 times greater than those charge for residential and commercial users.

“It is a very difficult issue,” Mathis told in an interview. “What we want to do is to charge them based on what the meter shows.”

But most government offices are not metered as they are situated in old buildings that have obsolete facility not suitable to a metering system, the CUC official pointed out.

Because their consumption is not monitored, the government apparently has not observed conservation and in fact some have kept their utilities on even after work hours, Mathis said.

“The government remains our only customer that is not metered,” she explained. “If we give them a lower rate, there is no incentive (for them to conserve).”

Estimated at $4 million annually, water and sewer bills of various departments and agencies is one area which Public Auditor Leo L. LaMotte has suggested should be cut down in an effort to boost savings of the Tenorio administration.

At least $2.7 million is paid out to CUC for its water and $1.3 million for sewer each year, both of which are, respectively, 20 times and 60 times higher than the rate for other consumers.

Although offices located in private buildings follow the lower rate, government-owned buildings are automatically charged the higher price. For instance, its pays $380 a month as a flat rate for 6,000 gallons of water.

“… (T)he government is overcharged by about $3.84 million and in effect is subsidizing CUC… There is no justification for such charges,” LaMotte said in a letter to Rep. Melvin Faisao who sought his comments on how to reduce public expenditures in view of the deepening financial crisis on the island.

“In this situation, utility cost is cheaper for the government to stay in commercial buildings than to stay in government-owned buildings,” he added.

Meanwhile, the government-owned utility firm is scheduled to hold a public hearing in January on a proposed 20 percent cut in the power rate for the government.

The move is in line with the cost-cutting program of Gov. Pedro P. Tenorio following steep drop in revenue collections which has pushed the budget down by $32.5 million for the current fiscal year.

Despite the anticipated impact of the move on CUC income, the reduction will help pump money into the dwindling coffers by about $1.5 million a year out of the $8 million the government pays for electric bills.