CUC closes two branches in cost-cutting move

Faced with serious financial troubles, the Commonwealth Utility Corp. will close its payment branches in San Jose and Garapan effective Nov. 30.

CUC executive director Lorraine Babauta said the utility firm has terminated the entire lease agreements for the two customer service and payment branches as part of CUC’s continuing efforts to reduce non-operation al expenses.

Currently, CUC is paying a monthly rent of $3,600 for the San Jose payment branch and $1,500 for the Garapan office.

By terminating the lease agreements, CUC expects to save a total of $61,000 in yearly rental expenses.

In an interview Friday, Babauta said a huge reorganization is also being undertaken at the CUC main office in Dandan. “All the employees assigned to the two branches are being regrouped and reassigned to areas that need attention, such as service orders and disputed accounts, which are being handled at the newly established ‘central processing unit’,” she said.

The central processing unit was created to concentrate all billing disputes and other customer concerns in one area, Babauta said. She explained that with three offices, CUC had difficulty in orchestrating response to customer service issues.

Babauta also announced plans to extend the teller system at the Dandan branch to accommodate the expected increase in visiting customers. She said four more cashiers would be assigned to the Dandan branch, where only two cashiers are currently detailed.

Babauta also encouraged customers to make payments at other locations such as Bank of Hawaii and Bank of Guam branches.

Further, she said customers could soon sign up for the CUC automatic payment plan. “By enrolling in this plan, customers don’t even have to bother and waste their time to go to CUC to make their payment. We will automatically deduct CUC bills from their credit card or bank account,” she said.

Babauta said in an earlier interview that financial problems might drive CUC to resort to reducing its workforce if the agency fails to either collect debts from the government or implement a rate adjustment.

Last Friday, she reiterated that CUC is in a dire financial situation due mainly to a 41-percent increase in fuel prices from 2002 to 2004.

“At the rate we’re going, we’re projecting to pay $46.5 million for fuel every year,” she said. CUC earns an average of $70 million in annual revenues.

CUC began implementing cost-cutting measures in June due to extreme fuel price hikes, as well as the CNMI government’s continued failure to pay its utility bills.

“[It] is mandatory that we put every effort in reducing expenditures and use our current resources conservatively to reduce our serious financial constraints,” she said in a June 24 memo.

Babauta said, in the next 90 days or until the financial conditions improve, the following measures will be in effect: no non-emergency overtime, freeze hiring, no off-island travel/training, no luxury or non-essential purchases, no luxury use of vehicles, termination of cellular phone subscriptions, and stoppage of premium pays.

Babauta said CUC might also reduce employee hours. “If the financial condition of the corporation worsens, and alternatives to increase revenues and decrease expenses are not in place to assist our situation, the worst case scenario would leave us no choice but to reduce employee hours,” she said.