Fuel costs cut CUC revenues

Rising fuel costs continue to jack up operating expenses of the Commonwealth Utilities Corporation, while the inability to collect payment for government utilities begins to shrink its revenues from October 1, 1999 to April 30 this year.

The government-owned utility firm spent $14.7 million to purchase fuel to run its power generators during the seven-month period, up by staggering 60 percent over the same period during the previous fiscal year.

This means that CUC pumped additional $5.5 million to buy nearly same amount of fuel that cost a total of $9.2 million from October 1998 to April 1999, due to the increase in world oil prices, according to the latest statistics provided by the corporation.

While market indicators point to possible reduction in oil prices, it is not certain whether CUC’s fuel costs would go down immediately as its fuel supplies have been ordered months ago at prevailing prices at that time.

Based on its records, total operating expenses for the past seven months also rose to $34. 3 million from $29. 1 million incurred by CUC during the previous same period.

But collections are now almost even at $34.8 million with the expenditures — a situation that utility officials blamed on the failure by the government to settle over $12 million in outstanding balance dating as far back as late 1997.

“Our problem here is that we have not collected from our huge source” of revenues which is the government, said CUC Executive Director Timothy P. Villagomez.

Comptroller Yenny Tom said the corporation will be able to realize savings if revenues improve within the next four to five months and oil price stabilizes.

He also indicated that substantial payment by the Tenorio administration to settle its CUC obligations will help straighten its financial shape.

Because of the impact on its stability, utility officials have renewed their appeal to Gov. Pedro P. Tenorio to agree to their terms of retiring the debt by its immediate reduction by half and monthly payments of at least $250,000 afterwards.

Payment by the Department of Finance to CUC has been erratic, with the last payment of $200,000 received early last month. So far, the government has paid $5.5 million since October 1, 1999 for its utilities costs.

But the arrears have not significantly been cut down as the government continues to run utilities billings of close to $1 million a month.

Mr. Villagomez said he will sit down with Finance Sec. Lucy DLG Nielsen again to press CUC’s terms, whom they have been trying to persuade to come to an agreement since four months ago.

The administration has been unable to meet its various obligations to vendors, such as retirement share and utilities, due to the financial difficulties confronting the CNMI as a result of the prolonged economic crisis.