Inos: CUC can overcome problems without receiver

Gov. Eloy S. Inos told reporters Tuesday that the Commonwealth Utilities Corp. can overcome its problems without a receiver as proposed by the U.S. Environmental Protection Agency. The governor also considers a loan from the Marianas Public Land Trust to pay off a portion of government agencies’ over $20 million debt to CUC representing unpaid utility bills, and may also tap Saipan casino developer Best Sunshine.

Lawmakers who met with the governor and CUC executive director Alan Fletcher on Monday said the CNMI government will oppose EPA’s request to the federal court to place some CUC projects under receivership.

The governor himself said Tuesday that CUC and the CNMI government are addressing the issues that EPA asked to be placed under receivership.

“Most of the problems that created this thing stemmed from inadequate or poor contractor performance, which is really beyond the control of CUC, although CUC could have done more close monitoring,” the governor said after signing the 2015 budget law and two other revenue-generating measures on Capital Hill.

House Ways and Means Committee chair Tony Sablan (Ind-Saipan) and House Public Utilities, Transportation and Communications Committee chair Larry Deleon Guerrero (Ind-Saipan) and other lawmakers have the governor’s back on the matter.

“We believe that we can overcome these problems without a receiver. The receiver will cost a lot of money because the receiver basically reports to the judge and he is going to do what he feels he should do without regard to cost and the end result would be us paying for that cost so we do oppose it,” Inos said.

The governor said if only there are available resources, the government would appropriate money to pay off debts to CUC.

“There hasn’t been any appropriation simply because of the lack of resources but we’re looking at ways to move cash and pay those debts down,” he said.

He said he will communicate with MPLT “if they would be willing to do this [loan] again and hopefully will provide some cash flow to CUC and pay these debts down because they are really mounting.”

Inos said while it is considered a loan, it is technically an “advance of the future interest income of the general fund from MPLT that’s usually paid every year.”

The governor does not believe MPLT can accommodate the full amount of debts to CUC, at over $20 million,

A portion, he said, would help, just like what it did when CUC tapped Aggreko during the years when Saipan experienced rolling blackouts.

Inos said the government is in fact “on the last leg, last payment of some $600,000 now.”

The governor clarified that the CNMI cannot tap Covenant Section 702 or capital improvement project funds because the CUC debts are “operational” in nature.

When asked whether the government can request casino developer Best Sunshine to use its planned $10 million utility vouchers for CUC residential users, Inos said they haven’t initiated anything on the matter.

He said the government didn’t ask for the utility vouchers, but it was Best Sunshine’s offer as part of their public contribution plan. Best Sunshine was granted an exclusive license to develop a $3.14-billion integrated casino resort on Saipan.

“Yes that’s one of the things that we need to talk about but Best Sunshine is looking at how their program can benefit individual residents and they want to do that through the voucher system. If we convert it to a payment of agency accounts, then their promise to the residents would not be fulfilled unless they cough up another $10 million and so forth. But we’ll be happy to look at that. If that’s a viable thing, we’d like to get an agreement to do it but that would not help the individual residents as promised in the agreement,” Inos added. (Saipan Tribune)