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CUC is broke—transition committee
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Posted on Jan 15 2006
The Fitial administration’s transition committee for the Commonwealth Utilities Corp. has come up with recommendations on top of findings about the utility firm’s financial health, including its dismal capability to sustain power generation without government subsidy.
Committee chairman Joe Torres, a CUC board member who recently tendered his courtesy resignation before Gov. Benigno R. Fitial, said the findings and recommendations are currently being reviewed by the administration.
“CUC is in pretty bad shape. CUC is broke,” Torres said. He refused, however, to divulge specific details pending the completion of the review.
Regarding the power crisis, Torres said the CUC would have to meet with the Legislature and the administration to solve the problem.
Last week, Senate president Joseph Mendiola issued a similar statement, noting that continuous government subsidy for power plants’ fuel consumption will not stop the crisis at all.
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.
The government has given CUC a total of $3.5 million in fuel cost subsidy since the week before Christmas Day to avert rolling blackouts during the holidays. CUC had to resort to power load shedding on Saipan on Dec. 20 and 21 as fuel stock on its power plants were running low.
More than a week ago, the government gave 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. Acting CUC executive director Tony Guerrero said then that the issue on sourcing out funds for the purchase of fuel when the stock runs out would be brought up before the new administration and the CUC’s board.
