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Babauta wants debt settlement with CUC
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Posted on Jun 24 2005
The Governor’s Office wants to pursue a settlement agreement with the Commonwealth Utilities Corp. over outstanding utility bills—an issue that is under litigation.
Governor press secretary Peter A. Callaghan said that the administration is discussing the matter with the CUC.
“The governor wants to settle this issue. There’s an ongoing negotiation for this,” he said.
He said the Attorney General’s Office is tasked to work with CUC’s legal counsel in coming up with a possible settlement agreement.
He said this is an “option” that the administration seeks pending litigation on the matter.
The CUC claims that the government now owes the agency some $20 million in utility bills.
In a court declaration, the government disputed the CUC’s claim, citing that the utility firm has in fact overcharged the government a total of $34 million for water and sewer services in the past 10 years.
Finance Secretary Fermin M. Atalig had said that the CUC’s “flawed” rate structure has resulted in overcharges to the government that averages $3.39 million per fiscal year.
Atalig said that in FY 2001, CUC billed the government $3.19 million in water and sewer charges, at the government rate of three cents per gallon for each utility. He noted that if the bill was recalculated based on the same usage but using CUC’s regular commercial rate of .119 cents for water and .05 cents for sewer, the government’s bill would have only been $104,525.
Thus, Atalig said that CUC charged the government over $3.1 million more than it would charge a commercial customer for the same water and sewer service.
In FY 2002, he said that CUC billed the government $3.24 million for sewer and water, when the amount should have been only $106,803.
The following fiscal year, CUC billed the government $4.1 million, when the government consumed only $133,478 worth of water and sewer services, he said.
Overall, CUC allegedly overbilled the government over $10 million during the three-year period.
Meantime, the government currently pays the CUC $650,000 every month following a court order.
