CFO says of CUC’s $93M total receivables, gov’t owes $73.8M

The Commonwealth Utilities Corp.’s total receivables stand at $93 million and, of that amount, a staggering $73.8 million is owed by the CNMI government, according to acting CUC chief financial officer Rodolfo Urbano.

In his presentation during the CUC board meeting last week, Urbano said the government’s account receivables have been steadily rising.

He disclosed that of the $93 million receivables, $58 million is owed by the Commonwealth Healthcare Corp.

As of Oct. 24, 2023, Urbano said, CHCC has been regularly paying its promised $525,000 per month, in compliance with its agreement with CUC, which began last May 12.

CHCC was short, however, by $4,000 on their last payment on Oct. 23, he added.

The May 12 agreement between CUC and CHCC requires CHCC to pay CUC $525,000 per month regardless if their consumed utilities are higher or lower than that amount, Urbano explained. He said the average CHCC utilities is $500,000.

Urbano said CUC’s sales and billing have been relatively consistent. He said CUC’s average monthly revenue is $9 million, while its monthly expenses are averaging at $8.5 million.

Since they’re making sure that every expenditure is budgeted and accounted for, Urbano said that payables are current and vendors are paid on time.

Urbano said that actual revenues exceed budget revenues because of an increase in the Fuel Adjustment Charge. However, he said, operating expenses, which also include fuel cost, is also above the budget and this only offset by the increase in the FAC.

“So overall, CUC spending is within the allocated budget for the fiscal year,” Urbano added.

As for CUC’s cash status, he disclosed that, as of Sept. 30, 2023, CUC has $57 million in the bank in restricted and unrestricted reserve.

With respect to the purchase of a new power engine, which is currently being installed at Power Plant 1 in Lower Base, $1 million is reserved for the last payment, he said.

Urbano said $300,000 is reserved for Power Plant 3 at the airport and $521,000 for the contract for the diesel engine No. 2 foundation.

Urbano said they also reserved for one year $600,000 for Settlement Fund; $687,000 for payment to the U.S. Environmental Protection Agency and U.S. Coast Guard for oil spill; $3.3 million for stipulated order 2 funds as required by the U.S. Environmental Protection Agency; and $1.1 million for a technical manager for oil as ordered by the federal court.

For Mobil alone, Urbano said they’re paying $5 million to $6 million a month for fuel.