CUC: Energy savings plan, $300K should serve as basis of hospital payment plan

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To finalize an adequate payment plan, the local hospital has to realize energy savings of about $250,000 and lessen its average $500,000 monthly utility bill to a number it can afford, says Commonwealth Utilities Corp. board director David Sablan Jr.

The payment plan would also entail a commitment to pay the hospital’s past dues, said Sablan. The hospital, or the Commonwealth Healthcare Corp., owes about $16 million in past due accounts to CUC.

In a payment plan proposal last month, CHCC executive director Esther Muna described changes to their monthly utility consumption.

According to Muna, the hospital has “installed new oil-less compressor chiller system; installed new energy-efficient hot water boiler system; placed areas in zones permitting us to shutdown non-critical/non-patient services areas after hours” which cuts the usage of their air handler units; “began installation of a new energy-efficient HVAC system” which is estimated to be completed in three months; and “obtained a [Department of Interior] grant to develop a renewable energy system.”

When asked for a comment on these plans, Sablan said the question is if the hospital has allowed one of CUC’s engineers to evaluate its cost savings.

Speaking to these “quantifiable savings,” he said if the hospital’s plans equated to about $250,000 in savings then CUC and the hospital “may have a possible agreement.”

“But they are going to need to have at least 300,000 in cash every month to pay,” he added, as CUC owes about $500,000 in utilities a month. “If they are able to show they can pay $300,000, [and] they are able to show they can conserve $250,000, and we are able to monitor it, then I think we have the conditions for a working payment plan,” he said.

The CUC board met last week to discuss a “draft contract” center around a reported $150,000 payment plan.

For his part, Sablan disagrees with this payment of $150,000, as he says the hospital has said they can afford monthly payment of about $300,000 a month.

Last week, the board directed its management to meet with CHCC to discuss a possible payment plan.

According to Sablan, CUC has been close to working out contracts, or “memorandum of agreements,” with the Public School System and the central government on payment plans for unpaid dues.

With regards to the hospital, though, Sablan said they never come close.

The letter from Muna proposes a payment of $250,000 for the month of June.

It proposes that CHCC will then make “at least” $150,000 in monthly payments thereafter, using its current budget and revenues until “CHCC completes installation of a renewable system.”

In her letter, Muna also acknowledges that their current billing is unaffordable while trying to provide quality health care to residents.

Citing past financial audits, Muna said their operating losses are almost equivalent to their utilities cost.

She also said their FY 2015 appropriated monthly budget is only $101,730.16, while their total utility charges for May was $444,300.72.

She said insufficient funding has made it difficult to even spread payments throughout their operational needs and avoid discontinuation of critical services.

Dennis B. Chan | Reporter
Dennis Chan covers education, environment, utilities, and air and seaport issues in the CNMI. He graduated with a degree in English Literature from the University of Guam. Contact him at dennis_chan@saipantribune.com.

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