CUC eyes mutually acceptable resolution on collection lawsuits

Posted on Feb 26 2014


More than two months after the Commonwealth Utilities Corp. sued three of its biggest customers, nothing solid has been reached to date by all parties concerned, according to CUC chief financial officer Charles Warren.

However, he remains optimistic that something positive will come out from the cases, which aim to collect $18.9 million in unpaid obligation to the corporation.

CUC sued the central government, Public School Sytem, and the Commonwealth Healthcare Corp. in early December for unpaid bills. The healthcare corporation has the highest arrears totaling $9.690 million, including pre-judgment interest. The Public School System owes $5.936 million while the central government owes $1.241 million.

These three respondents, according to CUC, have failed, refused, and neglected to pay for utility services covering previous fiscal years.

Warren told Saipan Tribune yesterday that despite some discussions with some parties, no definite answers have been reached to date.

“While CUC has had discussions with PSS, no agreement on payment of their unpaid obligations has yet to be reached,” Warren said.

He also disclosed that no discussions have been held with CHCC yet.

Warren said that CUC still hopes to reach an amicable settlement with these agencies.

“For the collection lawsuits, CUC looks forward to a mutually acceptable resolution. It is too early in the process to know exactly what form this resolution will take,” he said.

CUC disclosed that if these customers’ arrears and all future bills are paid on time, this would lower the LEAC (levelized energy adjustment clause) charges for all customers by about $5.5 million and increase the amount of cash available to CUC by $2.3 million.

In a separate interview with Board of Education chair Herman T. Guerrero, he disclosed that PSS is eyeing the unremitted maintenance-of-effort funds from the central government to pay its arrears with CUC. Based on PSS records, the outstanding MOE amount is at $7 million covering fiscal years 2010 and 2011.

However, Gov. Eloy S. Inos recently told Saipan Tribune that the government has no funds to satisfy the MOE requirement at this time. He also could not immediately specify the MOE amount owed PSS pending the administration’s request to change the MOE formula.

Meantime, the CHCC board is slated to tackle on Thursday what the corporation plans to do with the collection lawsuit filed by CUC. In an earlier interview with Saipan Tribune, CHCC interim CEO Esther Muña said they do not dispute CUC’s bills but that the hospital can only afford to pay just half of what it consumes every month.

She disclosed that the corporation has a priority list for its expenditures, which include paying off little by little the “old accounts” owed vendors. When that is resolved, CHCC will then have money to spare for CUC.

Moneth G. Deposa | Reporter

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