CUC says no to debt forgiveness to gov’t

Saying they are being generous by not disconnecting utility services to the government, Commonwealth Utilities Corporation Board Chair Rosario Elameto yesterday opposed a recommendation to write off portion of the debt it has accumulated over the past six months.

She said the government must settle its bills amounting to $6.8 million based on an easy payment plan that will be worked out between CUC and the Department of Finance to avoid disconnection.

“Commercial and residential customers are disconnected for (overdue charges) less than $100,” Elameto said in a statement. “The government owes our utility $6.8 million and customers want to know why the government hasn’t been disconnected.”

Her reaction came after Rep. Karl T. Reyes, chair of the House Ways and Means Committee, suggested the other day that the government-owned utility firm could help the cash-strapped Tenorio administration by making retroactive the forthcoming power rate reduction for public offices and buildings.

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 also to wean CUC away from heavy subsidy.

According to Reyes, if CUC agrees to cut the rate prior to the effective date, 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.

Elameto, however, disagreed, noting that the government could take advantage of CUC’s “generosity” to make payment schedule favorable to the administration’s ability to raise enough funds.

“We’ve adjusted the rate so that the government is no longer subsidizing the utility or the customers. But to ask the government to subsidize $6.8 million or write it off in the form of a subsidy is wrong, I’d say disconnect them,” the newly-elected board chair explained.

She also disclosed that some members of the Legislature reprimanded them during a recent meeting to confirm her appointment that CUC has been very strict when it comes to others not paying their bills, but the government is one errant customer that doesn’t get disconnection notice.

If they would adhere to equal treatment, Elameto said it would mean immediate cut-off of utility services to several departments and agencies of the Commonwealth.

Earlier, CUC board directors have expressed worry over the inability of the government to settle its mounting utility bills, warning that it would have tremendous impact on their financial standing.

To resolve the deadlock, the CUC comptroller is expected to meet with finance officials within the next few weeks to try to work out the payment plan.

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.