Atalig enumerates solutions for CUC funding woes

The CNMI’s power crisis may be solved by reducing tax rebates from the current 90 percent of taxes paid to 80 percent, retired Finance Secretary Fermin Atalig said.

Currently, the CNMI government subsidizes the Commonwealth Utilities Corp.’s fuel cost to sustain power generation on the islands. Government subsidy since mid-2005 has totaled around $17 million, more than half of which were used to purchase fuel for the CUC’s power plants.

Under Atalig’s suggestion to reduce tax rebates, a taxpayer will only get $80 instead of $90 in rebate for every $100 tax paid.

“We can bring in another $5 million to $10 million [to government coffers],” Atalig said.

This developed as the government has yet to fully release tax rebates pertaining to Tax Year 2004. Atalig said only about $7 million out of over $15 million in total rebates have been remitted to taxpayers.

Atalig said there are three viable options to solve the CUC’s power crisis, including the continuation of the emergency declaration by the new governor, Benigno R. Fitial, to enable him direct control over the autonomous government corporation and empower him to reprogram funds.

Another option, Atalig said, is to raise CUC’s electricity rates. The CUC has pegged residential and commercial rates at 11 cents and 16 cents, respectively, for every kilowatt-hour consumed since 1989. On Guam and in Palau, residential rates reach 21 cents and 22 cents, respectively, according to CUC chairman Frank Guerrero.

Atalig clarified, though, that the options he voiced out are merely his suggestions and not the position of the Babauta administration.

Last week, the government gave the CUC some $2 million to pay for Mobil’s delivery of 1.1 million gallons of fuel that would sustain power generation for the next 18 to 20 days.

According to acting CUC executive director Tony Guerrero, the issue on sourcing out funds for the purchase of fuel once the current stock runs out would be discussed with the CUC’s board and the administration of Gov. Fitial.

The CUC has been suffering from a cash flow problem, with its monthly collection hovering around $6 million only, despite the implementation of the fuel surcharge. The power plants’ fuel consumption costs approximately $179,000 daily.