CUC to cut power of 40 gov’t offices

The Commonwealth Utilities Corporation yesterday started sending out disconnection notices to more than 40 government agencies due to the government’s failure to settle utility debts amounting to over $12 million.

Citing the strain caused by CUC financial setback and operational costs, CUC Executive Director Timothy P. Villagomez underscored that government offices won’t receive special treatment and utilities services will be disconnected should they continuously refuse to recognize the notices.

In the next 29 days, CUC will strictly implement its disconnection procedure to prevent disruption of services to paying sectors like home-owners and other businesses.

Mr. Villagomez disclosed agencies who received their disconnection notices yesterday were the Department of Finance, Passport Office, Revenue and Taxation Division, portion of Northern Marianas College, Women’s Affairs Office, Indigenous Affairs, Community and Cultural Affairs, Division of Agriculture, and the Park Services.

The Wednesday disconnection notices mailed and delivered to non-essential government offices only amount to $300,000 but the next cycle will cause their unsettled bills to shoot up, the executive director explained.

What’s worst than this is that the next three cycle of meter reading is projected to reach a past due balance of $1.3 million which will affect the largest groups of government departments on Saipan, Tinian and Rota.

“We’re serious about collecting current and past due bills from the government because our utility also has bills to pay to local vendors and to Mobil Oil,” Mr. Villagomez pointed out.

The executive director explained also that CUC suffered a major setback when its operating income fell over $9.5 million in FY2000 and the serious credit problem of the CNMI government has been straining the agency’s operations for several months now.

The agency was forced to cut maintenance by over $1.1 million in FY2000 not to mention utility operations, expenditures for supplies among others.

The utility agency owed CUC Mobil Oil an estimated $2.9 million and has been spending at least $3.3 million for fuel every month and paid 75 percent more for the last two fuel shipments.

Only last week, the oil company reprimanded the agency and warned that fuel won’t be delivered unless accounts are settled.

At present, CUC is facing grave concerns whether the CNMI government will be firm on its promise to pay its past due accounts accumulated through the years.

The CNMI government made two payments in the last week totaling $1.6 million but still owes more than $12 million to CUC since the recent payments were applied to delinquent utility bills in 1999.

Mr. Villagomez further explained that departments and agencies typically use $825,000 worth of electricity each month and the finance department has to pay the current monthly bill as well as large portions of the past due amounts to chop off a big portion of the delinquent accounts.

He said CUC has already asked Gov. Pedro P. Tenorio to settle the debts and was told that payments will be eventually made. However, the government paid only $424,000 of the $829,000 utility bill.

Because of these circumstances, CUC is $2 million short even before payments to Mobil Oil were made. In addition to this, no local vendors will be paid unless the government settles its utility bills, he warned.

Despite the distribution of disconnection notices, CUC officials stressed that the government can still make last minute payments to avoid disruption of utility services so as not to compromise their operation.

But CUC Board Chair Jesus T. Guerrero said only essential agencies will be spared from the disconnection processes. These agencies are the Commonwealth Health Center, Department of Public Safety, Traffic Lights and Street Lights, Public School System, and the Emergency Management Office.

“We are concerned that the lack of electricity could affect businesses that need government operations. It is a serious economic matter, and we have evaluated it from every angle. But I assure you that if Mobil Oil cuts off our fuel supplies, and generators stop working because we cannot conduct maintenance, then all businesses will be in the dark,” Mr. Guerrero stressed.

Besides, CUC personnel will consistently monitor whether these government agencies make full payments just before the disconnecting services are implemented.

He also said Mr. Villagomez is in constant communication with agency directors to inform them of the disconnection plans and urge them to take whatever actions necessary to pay their individual accounts on time.

The chair defended that the measure was not to worsen the economy but to stress that government should not be allowed to use free utilities when low-income families and consumers pay on time.

He said utility workers were ordered to constantly verify government accounts to ensure that payments are made and that disconnection is not necessary.