CUC receivables remain at over $33 million

The Commonwealth Utilities Corp.’s receivables remain above $33 million, despite management reports that it has reached settlement agreements with several delinquent customers.

CUC comptroller Sohale Samari said utility receivables total over $33.7 million as of the end of November 2004.

Of this amount, about $19.6 million, or 58 percent, is due from CNMI government agencies. The government’s alleged debt went up by 9.5 percent, as compared with the $17.9 million it reportedly owed CUC in July 2004.

The remaining $14.1 million, or 42 percent, is due from residential and commercial customers. CUC estimates that about $8.7 million of this amount is uncollectible, Samari said.

He said the allowance for doubtful accounts includes over $914,000 that is due from 21 customers who have easement claims against CUC. These customers, he explained, are seeking compensation for utility service lines that cross their properties.

These costumers, Samari said, have stopped paying a part of their utility bills, and will continue to do so until the amount of compensation is agreed upon. “Administrative hearings have been held for a number of claims and CUC is awaiting the outcome to pursue collection, should it be in favor of CUC,” he added.

Thus, CUC has net receivables totaling over $25 million.

Samari reported, however, that CUC has managed to convert $870,000 in account receivables into notes receivables.

A delinquent customer has also issued a $500,000 promissory note for unpaid bills. The amount will be paid in 10 installments of $50,000 each, Samari said.

About $5.4 million, or 16 percent, of utility receivables are outstanding 1 to 15 days. Those past due, or outstanding 16 to 45 days, total $1.8 million. Receivables that are in default, or outstanding more than 45 days amount $26.5 million.

Of the $26.5 million of utility receivables in default, over $16.3 million is due from CNMI government agencies, CUC said.

“It is CUC policy that utility receivables are due and payable within 15 days of billing. If a receivable is not paid by 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 despite its alleged $19.6-million debt because of a temporary restraining order issued by the court.