CUC back in emergency

The Commonwealth Utilities Corp. is again under the administration’s direct control, with Gov. Benigno R. Fitial declaring CUC under a state of emergency effective yesterday.

Fitial said the new emergency declaration for CUC will remain in force for 60 days.

After this period, an executive order permanently placing CUC under the Executive Branch will become effective. The executive order, which will abolish the CUC board of directors, was also signed yesterday.

“The CUC right now is boardless and CUC right now doesn’t have an executive director. So CUC is at present in a state of disarray. We need to move in and take control of CUC,” Fitial said in a news briefing yesterday.

Lt. Gov. Timothy P. Villagomez, a former CUC executive director, said that the purpose of the governor’s action is two-fold: to bring in a financial management team to evaluate CUC’s exact financial situation and to improve CUC’s operation.

He noted that the administration currently provides CUC with a $2-million subsidy, on top of the $800,000 paid for the government’s utility bills.

“Because of this, a lot of other government programs have been put aside. We need to ascertain exactly what brought CUC to this stage and come up with solutions to address its financial woes,” Villagomez said.

The government is also looking at CUC’s operations, including the fact that the power plants are under-generating and losses resulting from CUC’s failure to connect all its customers to the grid.

“Not only is CUC in disarray, it’s not conducive for business. There’s no direction. And you have a person currently in-charge who is working in an acting capacity and who has reservations on what he can commit the corporation to and what he cannot,” Villagomez said.

CUC had been in a state of emergency during former Gov. Juan N. Babauta’s last months in office.

Babauta’s state of emergency declaration, which was in effect for seven months beginning in May 2005, had granted the former governor full authority to reprogram funds from other government services to subsidize CUC’s fuel purchases, maintenance and other expenses.

Babauta had lifted the declaration before Fitial assumed office. He had cited two reasons for his decision: “First, the Commonwealth is no longer threatened by a catastrophic collapse of the utility system. The second reason is out of respect for the incoming administration. They will have their own ideas and plans for keeping the utility running and the Commonwealth safe. So I want to leave CUC in the management status provided by law and not in a state of emergency.”