CUC comes up with payment plan for CHCC’s $60M arrears

The Commonwealth Utilities Corp. has come up with a payment plan for the Commonwealth Healthcare Corp. to resolve the $60 million it owes the utility agency, according to acting CUC executive director Betty G. Terlaje at a CUC board meeting last Thursday.

This came on the heels of CUC board chair Janice A. Tenorio noting that the memorandum of understanding between CUC and CHCC will expire next month. Under the MOU—which was signed in May 2023—CHCC resumed paying its monthly bills starting with its April 2023 utility bill of $525,000. CHCC agreed to continue to make regular, timely, and continuous payment like any regular paying utility consumers.

In April 2023, CHCC’s outstanding arrears—overdue electric, power, wastewater, and late fees—have already reportedly reached $53 million.

Terlaje told the board on Thursday that they need to meet with CHCC to talk about brokering another MOU. She said that, based on their books, as of Jan. 31, 2024, CHCC has $60 million in arrears, and $32.89 million is for charges.

Terlaje said under her proposed payment schedule with CHCC, if CHCC elects to pay the principal balance over a 10-year payment period, CUC would charge them no annual interest and require them to pay $274,090 in monthly payment on top of the $525,000 that they are paying for their current usage—for a total of $799,090 monthly payments.

If CHCC wants to pay a lower amount, then it would be over a 20-year payment terms at 2% annual interest rate, Terlaje said. Under that payment term, CHCC will be required to pay $166,000 monthly payment on top of the $525,000 estimated current usage, for a total of $691,000 monthly payments.

Terlaje has shared the proposed payment plan for CHCC with the U.S. Department of Justice. She said all the DOJ emphasized is that they want the arrears addressed.

She suggested it would be up to the CUC board if they are going to leave penalties out for now.

She said the board should approve both payment term options, then it would be for CHCC to select which option they want.

Terlaje said she recommends the 10-year payment plan to make this more doable as it is more convincing for CHCC not to pay interest.

She said the U.S. District Court for the NMI wants to see an MOU again so that CHCC can to keep current in their bills, on top of addressing the arrears.

“So we got to come up with something that will address the arrears,” Terlaje said.