CUC warns of payless paydays

With revenue losses reported to have reached $1.8 million to date, the Commonwealth Utilities Corporation warned of a possibility that employees may not be receiving their respective paychecks on time.

In fact, utility officials are seriously considering reduced working hours to commensurate increasing expenses and overall economics, CUC comptroller Ed Williams disclosed.

In a report, Mr. Williams told CUC officials that fuel prices continue to shoot up by 53 percent, aggravating the corporation’s current fiscal standing. As if this is not yet enough, outstanding accounts with other CUC vendors remain unpaid.

The utility corporation settled last week its $3.4 million debt to Mobil Oil Marianas while checks payable to other vendors were put on hold due to insufficient funds.

CUC’s operational funding deficit was also attributed to numerous off-island travels of utility officials involved in the Enron power plant negotiation which collapsed last week.

For 2001, CUC is operating at a loss of $1.8 million compared to operating income of $3.9 million in year 2000.

This, despite the strict implementation of austerity measures by the Tenorio Administration, which include reduction of professional services by 21 percent; 10 percent decrease on communication expenses, and 47 percent drop on freight charges.

In order to pay other vendors, Mr. Williams recommended the immediate payment of utility bills incurred by CNMI residents and the fixed monthly payment of the Commonwealth government.

The Department of Finance earlier agreed on the $800,000 monthly payment for the utility bills of government offices and senatorial districts. CUC and DOF agreed that payments should be forwarded on the first business day of each month. Request for the April payment has already been forwarded, said Mr. Williams.

Further, CUC is currently studying possible utility rate increase to aid operations of the utility company. Any increase in fuel prices will be passed on to the customers who will also be offered credits once the price decreases. The proposal stemmed from the US Department of Interior Reviews of CUC.

With the recommendation, utility officials are confident that there will be a dramatic increase in CUC’s revenue generating capacity and that increases will be realized within the next 60 to 90 days.

Mr. Williams also urged CUC to conduct complete cost-of-service study for rate hikes which will include real costs of services to Tinian, Rota, and outer areas of Saipan, new homesteads, field maintenance, and growth factors. (EGA)