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Govt’s utility payments short by $4.4M
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Posted on Aug 25 2005
The government’s payments for utility expenses from fiscal year 2002 to date are short by $4.4 million, Gov. Juan N. Babauta disclosed yesterday.
According to the governor, the Commonwealth Utilities Corp. has billed his administration a total of $40.5 million since fiscal year 2002. During this period, the government has paid CUC only $36.1 million.
The $4.4-million difference occurred even with the administration paying CUC $2.1 million in excess since the beginning of FY 2005. Babauta reported that the government’s utility bills amounted to $9 million since October 2004, but the government has already paid CUC $11.1 million.
In FY2002, CUC billed the government $9.6 million and received a payment for $8.6 million. In FY003, the government paid only $9.3 million of its $10.9 million utility bill.
The largest underpayment was made last fiscal year, when the government settled only $7.1 million of its $11 million bill.
Babauta maintained, however, that the government actually paid CUC $4.4 million in excess if the fuel tax subsidy was factored in. “CUC gets a break when they buy fuel. They don’t have to pay fuel tax. They get to keep that money,” he noted.
Babauta also reported that some $9.1 million has been reprogrammed to CUC since he assumed control of the utility firm, pursuant to the May 19 state of emergency declaration.
Of this amount, $5.1 million came from local funds and $2.7 million from the U.S. Department of the Interior’s capital improvement program funds for the Commonwealth.
The Marianas Public Lands Authority also contributed $1 million and agreed to make an advanced payment of $300,000 for its utility expenses.
Babauta said the $9.1 million recently diverted to CUC does not cover the $3 million that the utility has to raise monthly to pay for fuel.
“CUC has to pay $3 million a month for fuel. This is $1.6 million more than it collects, so it’s in the negative every time, even with the fuel surcharge. The government, using taxpayers and federal money, is making up the difference. It’s not cheap. The price of oil is going to continue to rise. Ultimately, what we need to become is an energy-efficient economy,” Babauta said.
