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Administration wants debt settlement with CUC
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Posted on Jul 22 2005
The Babauta administration is looking at the possibility of paying the Commonwealth Utilities Corp. a lump sum amount for its outstanding debts on the condition that it will meter all government buildings to determine actual usage.
“That’s one of the points of discussion. We are paying lump sum if they will meter all government buildings and charge us for actual usage,” said press secretary Peter A. Callaghan.
He said both the CUC legal counsel and the governor’s legal counsel are exploring the possibility of an out of court settlement.
The administration brought the issue to court last year to prevent the CUC from disconnecting government agencies due to nonpayment of utility bills.
CUC said the central government’s outstanding utility debt is between $10 million to $18 million.
The government, meantime, alleged that CUC has been charging the government seven times higher than commercial rates in water and sewer services.
“We dispute the amount. We’re saying that it’s just a bit too high,” said Callaghan.
He noted that the litigation is not about power billing.
“Its not because of power rate. Power rate is fair, but water and sewer is 10 times the regular rate. It’s absurd. We don’t even have water meter. It’s not even a 24-hour service,” he said.
He said the government has been paying for its power consumption.
“We’re not late in our payment. In fact, we’ve paid over $9 million for this fiscal year alone,” he said.
The government is only appropriated $5 million for utilities a year.
Callaghan said that the governor has reprogrammed funds to pay off CUC bills.
Following a court instruction, the government is paying $650,000 a month to CUC.
In view of the CUC’s financial crisis, the government said that it has paid CUC in advance now totaling some $4 million.
