CUC asked to write off gov’t debts

The chair of the House Ways and Means Committee yesterday broached a proposal to ask the Commonwealth Utilities Corporation to write off portion of the $6.8 million in unpaid utility bills that the government has accumulated over the past six months.

CUC should make retroactive the forthcoming power rate reduction for the government to lessen the burden of the Tenorio administration in raising funds to settle the bills, according to Rep. Karl T. Reyes.

The rate adjustment from the present 20 cents per kilowatt-hour to 16 cents, which is the same rate offered to commercial users, is scheduled to take effect by late this month — a move that utility officials said is intended to help the cash-strapped government and wean CUC away from heavy subsidy.

If Reyes’ proposal pushes through, this would mean at least 20 percent discount on the unsettled utility charges or about $1.36 million off the outstanding balance of the government.

“If CUC can handle it and if it is not going to jeopardize the operations, they should do it because they know that the government doesn’t have the money,” the representative said in an interview. “How else could we fund it?”

Reyes stressed the bold move is a necessary step at this time when government resources continue to decline and some departments and agencies need additional budget to provide services to the community.

“If (CUC) could, they should accommodate the government because they had been helped out by the government for so long. Now it’s their turn,” he explained, “and say ‘this is how much we need to receive from you and we can still survive paying off people and providing service to the community.'”

But Pamela Mathis, CUC chief information officer, said the measure is a board policy decision that must consider the current financial standing of the corporation as well as potential impact on its operations.

She also pointed out that the decision to lower the rate did not include a retroactive clause, adding that Reyes’ proposal could have legal and procedural problems.

“The government debt is so high that (non-payment) could affect CUC’s ability to fund several projects as well as to provide community services,” Mathis said when sought for her comments.

The CUC comptroller is expected to meet with finance officials within the next few weeks to try to work out a payment plan that will allow the administration to settle the debt.

Gov. Pedro P. Tenorio earlier has pledged to raise funds for the mounting utility bills, saying the government will have to tighten its belt further to meet various financial obligations.

The unsettled utility charges is the latest in the growing financial woes that have faced the Tenorio administration in the last two years since the Asian recession pulled down tourism revenues and slowed economic activities on the island.