Reduced workforce looms at CUC

The Commonwealth Utilities Corp. may have to resort to reducing its workforce if the agency fails to either collect debts from the government or implement a rate adjustment, CUC executive director Lorraine Babauta said yesterday.

In an interview, Babauta said that CUC is in a dire financial situation due to the series of fuel price increases and the government and other customers’ failure to pay their utility bills.

“The real situation is we’re running out of money. [We may have to consider] downsizing if things don’t turn around. We have to install major cost-cutting measures,” Babauta said.

She said the CUC administration is looking at the possibility of reducing its manpower or the staff’s work hours. The corporation currently has approximately 350 employees.

“We’ll be reviewing this on a case-by-case basis to determine the critical ones that need to be retained, to ensure that operation is not disrupted to a certain extent,” she said.

Babauta added that cost-cutting measures might entail, among other things, closing its branch offices and reducing the rental fee for CUC’s offices at the Joeten Commercial Building in Dandan.

Still, the CUC executive said the utility corporation would aggressively pursue collection of its accounts receivables through a newly created task force to be headed by CUC director Allen Perez, who is the chair of the CUC board’s audit and compliance committee.

“We’re put together an aggressive accounts receivable task force to go after those delinquent customers. Our goal is to make a difference in the collections. There might not be a lot of happy customers out there when we start doing that, but we have no other choice,” she said.

Further, the CUC management has not given up on its proposal to implement a fuel surcharge.

“We’re still working with the board to also entertain the fuel surcharge. Just the other day, the cost of fuel at the pump stations went up. It’s no big secret; it’s out there being faced by every customer when you go to the fuel pumps,” Babauta noted.

CUC chair Francisco Q. Guerrero, however, is still banking on the government’s payment of its $18.3 million debt to the utility corporation. “If the government pays their obligations, like they had promised, we will not go bankrupt,” Guerrero said.

For his part, CUC board member Joe Torres said he would not support the proposed fuel surcharge until the corporation has not resolved the government debt issue.

He maintained that CUC would be in a better position to impose a fuel surcharge once it has forced the government to pay or once the court order stopping CUC from disconnecting the government has been dissolved.

“Once the [temporary restraining order] is out, our policy stands—and it applies to the government—[that] we will start disconnecting the non-essential government offices. Then, the public will probably accept why we have to implement the fuel surcharge,” Torres said.

In April 2004, CUC notified the Department of Finance that utility services to various government agencies would be disconnected if the corporation did not receive payment on the bills. Finance responded by asking the court to stop the disconnection and by suing CUC. On April 23, the Superior Court granted the temporary restraining order. CUC and the government later agreed to extend the TRO until Nov. 30, on the condition that the government pays $650,000 per month.

Last Tuesday, CUC asked the court to dismiss Finance’s lawsuit and dissolve the TRO. The corporation argued that Finance has had nearly six months to address its failure to pay and to work out a plan or to demonstrate the validity of its arguments regarding the government’s utility bills. However, the matter has not moved toward resolution, CUC said.