Pressure on to lift CUC emergency

Gov. Juan N. Babauta has put the pressure on the Legislature to act and finally end the state of emergency related to the Commonwealth Utilities Corp.

In a letter to the Legislature, Babauta asked lawmakers to either give the Governor’s Office 100-percent reprogramming authority even without a state of emergency declaration, or enact the fiscal year 2006 budget that provides sufficient funds for the utility expenses of all government agencies and subsidy for CUC fuel expenses.

“You will, perhaps, not be surprised that I favor the second remedy. Extending the governor’s reprogramming authority only allows the Legislature to turn its back on the problem of power and pretend it does not exist,” Babauta told Senate President Joaquin G. Adriano and House Speaker Benigno R. Fitial.

“Enacting the FY 2006 budget is the responsible action for the Legislature. After all, the Constitution charges you with the duty to apportion public funds in a manner that responds to the needs of you individual constituencies and, presumably, the welfare of the Commonwealth,” he added.

The CUC state of emergency now enters its seventh month, with the governor extending it for another 30 days effective Wednesday, Nov. 16.

Babauta said he would have wanted to return CUC to the normal supervision of its board of directors, but he decided against it. He explained that while CUC now has a long-term fuel supply contract and generates more than enough power supply for Saipan, the utility remains incapable of paying for its fuel purchases.

Through the reprogramming authority provided by the state of emergency declaration, the Executive Branch has been able to subsidize CUC’s fuel costs.

“This is, however, nothing more than a band-aid solution to the underlying problem that CUC’s expenses are greater than its revenues,” he said.

The governor attempted to illustrate the extent of CUC’s need for subsidy. He reported that by the end of this week, the CNMI government would have given CUC $6 million since the fiscal year began Oct. 1.

“As you know, the Legislature has only appropriated $5 million for utility payments in FY06. Thus, the fiscal year is only seven weeks old and already 80 percent of the budget for utilities has been spent,” Babauta said.

He also maintained that government overspending could not be blamed for the problem, as government had actually reduced expenditures for electricity.

He reported that the Energy Conservation Initiative has saved taxpayers $404,000 since its inception in May 2005.

Furthermore, Babauta pointed out that the Governor’s Office could only continue subsidizing CUC for as long as the state of emergency was in effect.

“However, should the state of emergency be allowed to lapse the Governor’s authority to reprogram funds to this extent and for this purpose could be subject to challenge. Rather than risk that difficulty, which would only further compound the problem of assuring that the people of the Commonwealth have a reliable power system, I have extended the state of emergency,” Babauta said.