FOR FAILING TO PAY UTILITY BILLS CUC urged to cut gov’t power supply

Former Gov. Froilan C. Tenorio yesterday pressured the Commonwealth Utilities Corporation to cut off power from government offices for failure to pay over $11 million in overdue utility bills.

This would show that the government-owned company provides equal and fair treatment to all its customers as those behind in their payment are immediately disconnected from its power and water systems, he said.

Mr. Tenorio made the comment during a CUC board meeting in which he castigated the members for not applying its tough disconnection policy towards the CNMI government.

“It’s unfair, it’s illegal,” he told the policy-making body, noting that it is their responsibility to collect the payment from all customers — residential, commercial and government alike.

The former governor also accused the government of “taking advantage” of CUC’s soft-stance as he raised fear that such situation may invite a class-action lawsuit from the island residents.

It is the policy of the utility corporation to disconnect its services to those who are unable to pay their bills. “How can they do something like this when the government owes them… and they are not disconnected,” asked Mr. Tenorio.

He maintained that disruption to delivery of public services as a result of a power shut down is a problem of the government, and not CUC’s whose only responsibility is “to treat everybody equally and fairly.”

Payment plan

But utility officials defended their decision not to cut off the power from public buildings, saying that they are a government entity and thus, they cannot apply the same rules.

“I don’t think that CUC also has the authority to exempt the government from not paying its debt,” Mr. Tenorio pointed out. “They are supposed to be independent, supposed to be self-sustaining [agency].”

Although disconnection is an option if “worse comes to worse,” Board Chair Jesus T. Guerrero assured that they are taking necessary measures to settle the debt which has now ballooned to over $11 million representing unpaid bills over the last two years.

The board of directors in fact approved a payment plan during a closed-door meeting held immediately after Mr. Tenorio criticized them.

The scheme, to be presented to the Department of Finance for its approval, calls for payment of at least $1.5 million each month beginning May 15 until the arrears are cut by half to $5 million, according to Executive Director Timothy P. Villagomez.

But finance officials have informed CUC that the government is willing to pay between $250,000 to $500,000 per month — an offer that Mr. Villagomez said would not help slash the debt.

Since the government’s utility bills run up to $750,000 every month, he said that paying lower than this amount will lead to more arrears in the future.

“What the board suggested is for finance [department] to find a way to cut the $11 million in half and then we will agree to the $250,000 to half-a-million dollars of monthly payment,” added Mr. Villagomez.

There is no word yet whether the DOF accepts the new schedule of payment, although the utility chief disclosed that the department has other financial obligations to meet to government vendors.

“We are hoping that the finance department does pay… We’re very serious and critical about these things,” he said. The last time CUC was able to collect was two weeks ago when the DOF paid about $890,000.

Rising costs

Mr. Tenorio believed that the current administration must seek ways to settle the debt, noting that if the Legislature can raise its budget by $5 million, then the government can definitely use that amount instead for utilities payment.

The government is CUC’s single biggest customer on the island, representing nearly 10 percent of its annual revenues of over $65 million.

Utility officials have expressed fear over the inability of Gov. Pedro P. Tenorio’s administration to pay its bills due to potential impact on its own financial condition which has also been unstable due to increasing fuel costs and declining revenues for the last two years.

Since 1997, utilities costs of public offices have steadily risen from $7 million four years ago to $10 million last year. Despite this trend, the government only allots a small fraction of the budget to pay its bills.

For his proposed FY 2001 budget, Mr. Tenorio has earmarked $4 million — the same level appropriated during the previous year’s spending package.