DOF insists compromise on unpaid CUC bills

Finance Sec. Lucy DLG. Nielsen took a hard-line stance yesterday on the government’s tussle with the Commonwealth Utilities Corp. over its unpaid billings, saying both sides must compromise to resolve the long-standing issue.

She was quick to remind CUC officials that the government has been helping the utility agency overcome financial difficulties by waiving the excise tax on fuel which costs the CNMI coffers at least $3 million every year.

“The CUC board should take into consideration the contributions made by the government, such as funding for [capital improvement projects],” Ms. Nielsen told reporters in an interview after attending the confirmation hearing of Public Auditor Mike S. Sablan at the Senate.

She also stressed the government does not impose excise tax on the fuel bought by the government corporation to run its power plants.

“They do not seem to recognize that the government does this,” said the finance chief as she underscored the need to work together and cooperate since CUC is part of the government.

The Department of Finance has been regularly paying over $800,000 every month to cover its utility expenses, which is beyond its monthly consumption, according to Ms. Nielsen.

But she disclosed they have yet to agree on how to settle outstanding balance as there are still questions on the billings being claimed by CUC, like costs of water services in some government offices that she described as “outrageous.”

The utility corporation has claimed the government has run up to over $12 million in unpaid billings since early 1998 and has been seeking settlement through a payment schedule.

While meetings have been conducted to try to work out a deal in the past three months, CUC officials have expressed worry that the unpaid obligations is impacting on their operations.

The board last September warned the government that it would be forced to shut off utility services to non-essential departments and agencies if it fails to pay the debt.

This has been a major problem plaguing CUC, especially in light of its dwindling revenues and rising fuel costs.

Last month, CUC said it is bracing for tough times ahead as it continues to be saddled by revenue loss, which reached $300,000 for the last fiscal year — the first time in four years.