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CUC default prompts cut in Tinian’s power
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Posted on Jun 04 2008
Saipan’s primary electricity company, the Commonwealth Utilities Corp., has failed to pay its debts to a company on Tinian tasked with operating the island’s power plant, causing some customers on the island to lose service and sparking an outcry from local lawmakers.
In a June 4 letter to CUC chief Antonio Muna, Telesource, which operates Tinian’s power plant, claimed that CUC has not paid its monthly dues on a series of $180,000 promissory notes that funded the plant’s construction, maintenance and day to day services.
CUC’s failure to pay, according to the letter, threatens Telesource’s ability to pay its own third-party loans and buy supplies for the plant such as lubrication oil.
“Unfortunately, as of today we have not yet received payment,” for the month of May, the company said. “Regretfully, Telesource is at the limit of its ability to cooperate and we must take steps to ensure payment.”
Telesource is demanding payment within 15 days. The company’s acting general manager, Jeffery Barr, declined to comment on what steps it would take should CUC breach the contract further.
CUC’s alleged breach of contract forced Telesource last month to deny service to some residents on Tinian, according to a May 14 letter to Muna signed by senators Jude Hofschneider (R-Tinian) and Henry San Nicolas (C-Tinian).
“[T]he people on Tinian should not have to suffer for something that is not within their control,” the two senators said. “Tinian has a small, fragile economy that cannot withstand any major disruption in electrical services. An unstable power utility infrastructure will further stifle existing business’ struggle to survive and drive away potential investors.”
Tinian Mayor Jose San Nicholas also launched an inquiry into CUC’s failure to pay its debts to Telesource in a May 30 letter to the utility, citing the possibility of further power outage should the situation continue.
CUC’s Muna did not immediately respond to a request for comment.
As of press time, an informed source said that CUC had yet to respond to Telesource’s letter and still had not paid its debts.
