Rep. Corina L. Magofna (D-Saipan) wants to know if the Commonwealth Utilities Corp. is compliant with regulations related to crediting CUC ratepayers with interest on their security deposits.
In a Nov. 28 letter addressed to CUC executive director Gary P. Camacho that Magofna made available yesterday, she said the regulations outlined in the NMI Administrative Code and Commonwealth Code requires CUC to credit CUC ratepayers with interest on their security deposits.
When asked for comments, Camacho told Saipan Tribune that he and CUC are looking into the matter, and will respond and provide an update accordingly. Camacho added that CUC always wants to ensure it meets all necessary regulations and requirements.
In her letter to Camacho, Magofna, who is vice chair of the House of Representatives Committee on Ways and Means, she said some constituents have brought to her attention that some CUC ratepayers “have not been receiving credits for interests accrued to their security deposit accounts, both annually and/or upon disconnection of utilities, as required by regulation.”
The law says that CUC is to maintain an account indicating customer name, date of security deposit, and amount of deposit. Effective Jan. 15 of each year, “each account shall be credited an amount equal to the average ‘passbook’ savings interest rate payable during the past year based on rates from at least three local [Federal Deposit Insurance Corp.] insured banks.”
Another portion of the law requires the CUC comptroller to provide to CUC’s board of directors “an annual report in January of each year [that] explicitly details the amounts of deposits received, interest rate to be paid for the previous year, and total account liabilities.”
The law states that “[d]eposits shall be placed in an interest-earning trust fund to be established by the executive director. Funds collected shall not be used for any other purpose. All residential security deposit refunds shall be paid within 30 days after disconnection of utilities with earned interest.”
Magofna also references in her letter the Findings of the CUC Security Deposit Fairness Act of 2007 and the Legislature’s observation at that time: “[t]he CUC is a government-owned utility and should be sensitive to the needs of the community. Residents are struggling with increasing rates, surcharge fees, and an overall cost of living increase while their incomes are declining. Therefore, it is the duty of the CUC to hold these security deposits in a responsible and conscientious manner and to return such funds to residential customers with interest.”
“Is CUC complying with the regulations referenced above, whether in its entirety or partially? Furthermore, please advise as to what steps CUC is taking to ensure that ratepayers are credited with interest on their security deposits,” wrote Magofna.
She requested a response and clarification on the matter from CUC, as well as an up-to-date report “pursuant to this section of the regulation for the past three years including the current fiscal year” to be provided to her office within 10 days of receiving her letter.