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CUC gets the green light to borrow $10M from bank
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Posted on Jan 31 2012
By Moneth Deposa
Reporter
Reporter
The Commonwealth Public Utilities Commission approved during its last meeting Friday on Capital Hill a Commonwealth Utilities Corp. proposal to borrow $10 million that will be used to upgrade its facilities.
This comes soon after a bill authorizing the utilities company to borrow the money from the Rhode Island-based Independence Bank was enacted into law.
CUC deputy executive director Alan Fletcher lauded commissioner Viola Alepuyo’s decision and told Saipan Tribune that the agency can now move forward.
The $10-million loan will be used to improve CUC’s services such as those related to power generation and stipulated order requirements and for CUC projects on Rota and Tinian.
“The securing of that loan was contingent upon getting rate relief. With [Friday’s] PUC approval, what we need to do is go back to work. We need to do assessment to make sure we have the right debt coverage ratio and that we would able to pay our creditors,” Fletcher said.
On Friday, the commission authorized CUC to increase its electric base rate and water rate. Revenue raised from this rate hike is expected to help pay for the loan.
“CUC needs to go back to the table now, check our calculation and we will begin talking with Independence Bank and we will do it [right away],” Fletcher said.
Fletcher hastened to add, though, that the loan is not yet secure, pending the approval of Independence Bank. “I’m not going to say it’s a sure thing.but we’re optimistic. That money is critical to our operation,” he added.
CUC wants to borrow $10 million from Independence Bank of East Greenwich to complete the requirements of two stipulated orders that require CUC to upgrade its equipment to be able to supply potable water and to ensure oil containment at its power plants. This loan proposal has the backing of the U.S. Department of Agriculture.
