Directive tightens CUC reconnection policy

Commonwealth Utilities Corp. executive director Lorraine Babauta has prohibited the reconnection of disconnected CUC accounts without her or the CUC comptroller’s approval.

In an Oct. 7 directive, Babauta said the policy comes in line with an instruction by the CUC board of directors to ensure that the utility firm aggressively pursues the collection of all accounts with past due balances.

“To ensure compliance with these instruction, I am notifying you that accounts disconnected for non-payment, which have issues that need to be resolved, can be reconnected only if authorized by the comptroller or me,” Babauta said in a memorandum to credit and collections supervisor Elaine Q. Terlaje.

She cited issues that must be resolved before the reconnection can be approved. These include a tampered meter, a malfunctioning meter, an illegal connection, an unregistered meter, an unpaid balance for a closed account, or a billing dispute.

“Failure to comply with this directive will be cause for disciplinary action,” Babauta said.

CUC has vowed to take aggressive steps to collect from delinquent customers, amid increasing fuel and operation expenses.

As of the end of August, the corporation has utility receivables totaling about $33.2 million, according to a report by CUC comptroller Sohale Samari.

Of this amount, $18.3 million, or 55 percent, is due from CNMI government agencies. The remaining $14.9 million is due from residential and commercial customers, Samari said.

The comptroller estimated that about $9 million of the $14.9 million due from non-government customers is uncollectible. “Included in the allowance for doubtful accounts is over $900,000 that is due from 212 customers who have easement claims against CUC,” Samari said.

These customers are seeking compensation for utility service lines that cross their properties. They have stopped paying a part or all of their utility bills, pending an agreement on the amount of compensation due them.

This brings CUC’s net utility receivables to about $24.2 million.

CUC ages utility receivables based on the number of days the receivables are outstanding.

According to Samari, receivables that are current—or outstanding for one to 15 days—total $5.2 million. Receivables totaling $2.4 million are past due, or outstanding for 16 to 45 days. Some $25.6 million are in default, or outstanding for more than 45 days.

Of the $25.6 million of utility receivables in default, over $15 million are due from CNMI government agencies.

“It is CUC policy that utility receivables are due and payable within 15 days of the billing. If a receivable is not paid on the 15th day, a delinquency notice is sent the following day. The customer then has 14 days in which to pay. If the receivable is not paid, service is scheduled for disconnection,” Samari said.

CUC, however, cannot disconnect the government because of a temporary restraining order issued by the CNMI Superior Court. The utility agency had recently asked the court to lift the restraining order.