‘House ready to override veto’

The political opposition in the Legislature believes that the fuel surcharge is largely the result of “improper management” of the Commonwealth Utilities Corp.—an issue that can be traced to the Babauta administration’s “failure” to effectively run the government.

House leadership spokesman Charles Reyes Jr. also said that, in case the governor vetoes the bill to repeal the fuel surcharge, the Legislature is inclined to override it.

“There’s a good possibility of that. If the governor vetoes it, the House is certainly be receptive to a move to override it,” he said, noting that the Senate had also approved the bill earlier.

In explaining the need for the fuel surcharge, the administration is trying “to shift the blame to external circumstances beyond our control, such as the price of oil in the world market,” Reyes said.

“While that argument has some merit, we believe it is unrealistic to ascribe the blame primarily upon external factors alone. We do believe that the fuel surcharge is the result of external and internal factors that are well within our control. Internal factors involve the improper management of CUC over the past three and a half years,” he said.

“And apparently, CUC was not properly managed by the board of directors and by the administration, which appointed the board and the executive director over the past three years,” he said.

Gov. Juan N. Babauta had earlier said that the fuel surcharge fee cannot be eliminated due to increases in fuel prices, hinting that he would likely disapprove House Bill 14-343, which aims to repeal the law that allows the implementation of the fuel surcharge.

Babauta said that CUC’s fuel budget rose by 100 percent over a year ago—from $30 million to $60 million a year. He said this trend could have been remedied had the CUC board taken actions in a timely manner to compensate for the rising fuel costs.

“I know that it hurts people, and I wish I had some control over the price of oil, but I don’t,” he said.

For now, he said, the fuel surcharge is necessary “if we want to keep the lights on in the Commonwealth.”

The House leadership said, though, that the fuel surcharge could have been avoided if the administration had slashed non-essential travels and professional contracts. Also, it said that the administration failed to settle its debt with CUC on utility bills.

“We feel it’s the administration’s failure to make a timely and appropriate payment. Had that been done, we believe that the CUC fuel surcharge may well have been avoided,” said Reyes.

He noted that Vice Speaker Timothy Villagomez, who authored the bill to repeal the fuel surcharge, has publicly stated that “money used for nonessential travels could have been diverted to CUC payments; money paid for professional contracts should have been better diverted toward CUC operations and maintenance of power generators; and salary cap violations, the excess funds for that, should have been used for CUC.”

Press secretary Pete A. Callaghan said the House leadership “is absolutely wrong” in believing that CUC board members should manage CUC operations.

“I don’t think that the board should be running CUC on a day-to-day basis. That’s cited in the recommendation of the Harris Group study…because the board had too much influence. Politics interfered with efficiency in running the utility. I think the House is absolutely wrong in saying that. I think they are saying that for political reasons, just to blame the administration,” said Callaghan.

He said that if the Legislature overrides a veto of the bill, the question would be, “How will they subsidize the cost of fuel for CUC?”

“Right now, they have no alternative. What’s their recommendation? Appropriate funds? From where? I think that’s what the public wants to hear, not the platitude,” said Callaghan.

The Governor’s Office said government subsidies at this time are not the answer to CUC’s problems, noting that the agency would still be short of funds even if it received its $11 million billing last year.

Even the existing 3.5 cents fuel surcharge per kilowatt hour, which would net CUC some $14 million, is still not enough to cover the increase in fuel costs.