CUC: $8.2M of receivables uncollectible

The Commonwealth Utilities Corp. has considered $8.2 million of its total receivables uncollectible, with the accounts being past due for over 75 days.

CUC’s latest financial report showed that utility receivables totaled about $33.7 million as of Jan. 31, 2005. Of this amount, about $20.1 million is due from CNMI government agencies. The remaining $13.6 million is due from residential and commercial customers.

Of the amount due from households and businesses, CUC estimated that about $8.2 million is “uncollectible.” This includes all accounts due for more than 75 days, as well as over $936,000 that is due from 21 customers who have easement claims against CUC.

These customers, according to CUC, are seeking compensation for utility service lines that cross their properties. They 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.”

The doubtful accounts bring the net utility receivables to $25.5 million.

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

According to the utility firm, about $4.5 million of the receivables are current, or outstanding for one to 15 days. Those past due, or outstanding for 16-45 days, total $2.3 million. Receivables that are in default, or outstanding for more than 45 days amount $26.9 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,” CUC said.

CUC, however, cannot disconnect the government despite its $20.1-million debt, pursuant to a temporary restraining order issued by the court.

Aside from the utility receivables, CUC is expecting $167,000 from federal and CNMI grantor agencies for capital improvement projects and other assistance; $255,000 from numerous vendors for prepaid repair parts and supplies; and $104,000 from a vendor for the refund of the advance payment for undelivered Rota generator.

Further, CUC has receivables totaling $9,000 from CUC employees and board members and CNMI government officials from travel advances, and other miscellaneous receivables amounting $24.000.

As of Jan. 31, 2005, CUC had $1.1 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.