CUC’s proposed $10M loan now in the hands of Senate

The fate of the proposed $10 million loan of the Commonwealth Utilities Corp. is now in the hands of the Senate, which is expected to act on a bill that would transfer such authority to review and approve the loan from lawmakers to the Commonwealth Public Utilities Commission.

In a meeting Thursday, CPUC commissioners Viola Alepuyo and Joaquin Manglona affirmed their regulatory support for the loan proposal but emphasized that the final say is in the hands of the Legislature.

Introduced by Rep. Stanley T. Torres (Ind.-Saipan), House Bill 17-205 passed the House and awaits concurrence of the Senate.

Under the bill, the authority to review and approve CUC borrowings in excess of $500,000 would be transferred from the Legislature to the CPUC. Unless this bill is enacted into law, the commission is without any authority to approve the proposed loan.

CUC officials-executive director Abe Utu Malae, deputy executive director Alan Fletcher, and legal counsel Deborah Fisher-disclosed Thursday that the loan proposal has already secured the support of the Fitial administration based on their meeting.

CUC wants to borrow $10 million from Independence Bank of East Greenwich based in Rhode Island to complete the requirements of the stipulated orders. This loan proposal has the backing of the U.S. Department of Agriculture, according to the officials.

CUC filed an emergency petition with CPUC on Oct. 6, asking it to approve the terms of the proposed loan. On Oct. 25, the commission’s consultant, Georgetown Consulting, issued a report indicating that the proposal must first be approved by law.

Fisher described the loan proposal as good not only for CUC but for the entire Commonwealth, which has a poor credit rating. “This is something good for the CNMI. It will set a baseline for CNMI that we have credit worthiness for even maybe possible bonds. If CUC can get this loan, we can show that there is cooperation and support and when they see that, they will be much more interested in continuing to finance the CNMI,” said Fisher.

She said the written CPUC order is among the requirements of Independence Bank of East Greenwich.

She disclosed that the cash-strapped CUC is desperate to obtain financing so it could forestall increasing in its rates.

Malae, for his part, told the commission that the bank is willing to work with CUC because of the “character of the management” of the utilities firm.