Gov’t okays plan to settle CUC bills

The government has pledged to make a monthly payment of at least $1.3 million to the Commonwealth Utilities Corporation to pare down over $11 million it has owed in overdue utility bills for the past few months.

Finance officials have reached the payment plan with CUC after the government-owned utility firm demanded settlement of the debt.

“We made arrangement to pay on an installment basis. We are paying about $1.3 million to $1.4 million [a month],” Gov. Pedro P. Tenorio told reporters yesterday. “So we are trying to make good of our obligations.”

Fending off criticisms that they have been negligent in their fiscal responsibilities, the chief executive maintained that in the past the administration had tried to reduce the debt by paying “certain amount of money” everytime there were available cash resources in the government coffers.

However, he cautioned lawmakers not to reprogram the funds allotted by his administration for payment of government utilities during the current fiscal year, noting that the $4 million budget is really meant to meet its financial obligations to CUC.

In approving the FY 2000 budget proposal by the governor, the Senate wiped out the utilities appropriation from the package to shift the funds for the needs of Rota and Tinian municipalities.

The proposal is now under consideration by a bicameral committee tasked by the Legislature to review the budget bill after the lower house rejected the Senate’s move. It is not certain, however, whether the $4 million allotment will be kept for utilities payment.

Payment plan

CUC officials had been trying to negotiate for the past few days with Finance Sec. Lucy DLG. Nielsen for settlement of the arrears which represent unpaid power, water and sewer charges of the government over the last several months.

On Thursday, the CUC board approved a payment plan through which they hope to receive regular checks from the government in order to cut the debt at least by half.

The scheme calls for payment of at least $1.5 million each month beginning May 15 until the amount reaches by $5 million. The finance department earlier had offered settlement between $250,000 to $500,000 per month, lower than what it actually consumes in monthly utilities.

CUC Executive Director Timothy P. Villagomez said this is not acceptable to the board since the government’s utility bills run up to $750,000 every month.

Amid efforts to collect the government debt, public pressure has mounted on CUC to force the present administration to meet its growing financial obligations.

Former Gov. Froilan C. Tenorio asked the board last week to shut off utility services to public offices if it wants to apply its tough disconnection policy towards those who are behind in their 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 the government 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.