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Governor asked to bail out CUC from debt
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Posted on Feb 22 2005
Acting speaker Timothy P. Villagomez asked the governor yesterday to immediately identify funds for the Commonwealth Utilities Corp. to ensure the continued supply of fuel and avert a power crisis.
“As the chief executive of the Commonwealth, your leadership is urgently needed to avoid blackouts and resolve this crisis,” said Villagomez in letter to Gov. Juan N. Babauta.
The lawmaker, who chairs the House Committee on Public Utilities, Transportation, and Communications, said CUC has exceeded its credit limit with Mobil Marianas, its lone fuel supplier.
He said CUC has $10 million credit limit with Mobil and it has reached the maximum limit.
“Mobil will not supply CUC with additional fuel unless the government agency has paid down its debt. CUC, however, does not have the funds to reduce its liability to Mobil,” said Villagomez.
He said the utility firm needs at least $4 million to meet its immediate financial obligation to Mobil.
Failure to settle the CUC’s liability, he said, would certainly result in severe power situation.
CUC said it has exhausted its reserve funds due to increased fuel costs.
“CUC desperately needs funds to pay for the fuel needed to generate power throughout our islands. If CUC is not able to cover its liability to Mobil, we will not be able to receive additional fuel for the operation of our power plants,” said Villagomez.
