Babauta gets down to business on CUC concerns

Gov. Juan N. Babauta has put out a list of his concerns and instructions regarding the Commonwealth Utilities Corp.’s operations, giving CUC until this Friday to provide him a detailed plan to address them.

In a letter dated Sept. 21, Babauta said he was very concerned about the health of CUC, including utility services, the corporation’s finances, and administrative approach.

“Please tell me precisely how you plan to fix your combined utility system. Tell me what actions you will take over the next weeks, who will do each thing, and how you will pay for the activity,” Babauta told CUC chair Francisco Q. Guerrero and executive director Lorraine A. Babauta.

The governor also directed CUC to provide him within 10 days relevant documents to show exactly how the corporation plans to address each of his concerns, or tell him why CUC cannot provide the information.

“Tell me what is wrong and the consequences to fix it,” Babauta said repeatedly in his letter.

In an interview, Guerrero said the CUC management is now preparing the requested information. The governor’s concerns will also be part of the agenda for today’s CUC board meeting.

“I think each of the governor’s concerns has merit. I’m certain that we will be able to meet the deadline he has set,” Guerrero said.

He added that the governor’s instruction to get the CUC board completely out of day-to-day management is a very valid concern.

“The governor apparently has some knowledge about some board members who go directly to managers to make specific requests,” Guerrero said.

For the power division, Babauta asked CUC to bring the operating system to a reliable 85 megawatts—a combination of the demand plus 20 percent reserves—and then 120 megawatts.

CUC was also told to fix damaged in-service distribution equipment and create a replacement inventory; provide its load-shedding priority listing; and cut its oil bill by 10 percent.

For the water division, Babauta requested information on the schedule for drilling new wells—including who will do it and how much it will cost; the repair and maintenance schedule for the pumps; and the request for qualification and request for proposals for the water rate study.

Further, the governor asked for CUC’s schedule for buying and installing meters, including which employees will work and when, as well as the plan for finding and eliminating the “lost” 40 percent of the system’s sendout.

Babauta also instructed CUC to provide a plan to meet the U.S. Environmental Protection Agency’s requirements for Agingan Point, and the repair schedule to stop the worst of the rain- and seawater infiltration.

Other information requested regarding the wastewater utility are repair and maintenance schedules for debris removal and for the pumps.

Besides utilities, issues were raised about CUC’s finances. Babauta asked the corporation to produce a weekly cash flow statement for the next year and a budget by line of business.

Moreover, CUC was tasked to identify two revenue enhancements for each line of business for the next year, and the schedule to put in place rates to pay CUC principal bills, including oil.

On the administrative side, Babauta urged CUC to get the board out of day-to-day management and back to planning and policy direction, comply with CUC law and policy, make personnel changes to accomplish the listed tasks, make the staff accountable for the success of each task, and communicate the corporation’s progress to the stakeholders.