CUC receivables reach $33M

The Commonwealth Utilities Corp.’s receivables now total over $33 million, with more than half the amount due from the government.

According to CUC comptroller Sohale Samari, the CNMI government agencies owe CUC over $17.9 million, or 54 percent of the utility’s receivables. The remaining 46 percent is due from residential and commercial customers.

Samari also said that of the $15.1 million due from residential and commercial customers, CUC estimates that over $8.6 million—or 58 percent—is “uncollectible.”

Included in the uncollectible amount is about $858,000 that is due from 21 customers who have easement claims against CUC. These customers are seeking compensation for utility service lines that cross their properties.

These costumers, Samari said, have stopped paying a part of their utility bills, and will continue to do so until the amount of compensation is agreed upon. “Administrative hearings have been held and CUC is awaiting the outcome to pursue collection, should it be in favor of CUC.”

Thus net utility receivables total over $24.4 million, he added.

The huge amount of CUC receivables from the government has been cited as the main reason why the corporation needs to impose a fuel surcharge to customers.

At Tuesday’s board meeting, Samari said the government will be paying at least $75,000 a month if the fuel adjustment charge is approved by the board.

Title 4 of the Commonwealth Code, Section 8143 allows CUC to impose a fuel surcharge fee of up to 3.5 cents per kilowatt for all consumers of electricity.

CUC ages utility receivables based on the number of days the receivables are outstanding.

In his financial report, Samari said that about $6.4 million of the receivables are current, or outstanding for one to 15 days. Those past due, or outstanding for 16-45 days, total $1.8 million. Receivables that are in default, or outstanding for more than 45 days, amount to $24.8 million.

“It is CUC policy that utility receivables are due and payable within 15 days of billing. If a receivable is not paid by the 15th day, a delinquency notice is sent the following day. The customer then has 14 days in which to pay. If the receivable is not paid, service is scheduled for disconnection,” Samari said.

CUC, however, cannot disconnect the government despite its $17.9 million debt due to a temporary restraining order issued by the court.

Besides the utility receivables, CUC is expecting $394,000 from federal and CNMI grantor agencies for capital improvement projects and other assistance; $849,000 from numerous vendors for prepaid repair parts and supplies; and $111,000 from a vendor for the refund of the advance payment for undelivered Rota generator.

Further, CUC has receivable totaling $22,000 from CUC employees and board members and CNMI government officials from travel advances, and other miscellaneous receivables amounting to $24,000.

Samari also reported that the autonomous agency currently has $2.5 million cash available for day-to-day operational expenses such as production fuel, payroll, maintenance, and materials and supplies for power generation and distribution systems, water production facilities, and wastewater treatment plants.