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‘CUC-Finance dispute nearing end’
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Posted on Oct 20 2005
The Commonwealth Utilities Corp. announced yesterday that its long-running dispute with the central government over utility bills would end soon.
CUC chair Francisco Q. Guerrero said that the utility firm’s lawyers and the Attorney General’s Office, which represents the Department of Finance, were drafting a settlement agreement that was expected to be filed in court before the end of this month.
CUC is currently under the direct control of the Babauta administration. The powers of the CUC board of directors were suspended when the governor declared CUC under a state of emergency in May 2005.
Guerrero said that the funds reprogrammed to CUC under the state of emergency declaration would not be credited to the government’s utility account.
He added that the settlement would provide a utility rate structure that would be applied to government agencies. He refused to provide other details, pending finalization of the agreement.
“We’re getting close to having a settlement agreement. It’s only a matter of weeks before we can file it in court,” Guerrero said.
The Department of Finance sued CUC in April 2004 to prevent the disconnection of utility services to various government agencies due to non-payment of bills.
The Superior Court granted Finance a temporary restraining order, which has been renewed several times.
According to CUC, the government owes CUC an estimated total of $18 million to $20 million. Finance maintained, however, that CUC had overcharged the CNMI government almost double this amount for water and sewer services for the past 10 years.
Finance Secretary Fermin Atalig said CUC’s flawed rate structure has resulted in overcharges to the government that averages $3.39 million per fiscal year. He based this figure on a comparison between water and sewer bills charged to a commercial customer and the charges levied on the CNMI government for the same level of consumption of water and sewer services.
