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CUC emergency lifted ‘soon’
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Posted on Nov 22 2005
The latest extension of the state of emergency for the Commonwealth Utilities Corp. may be the last one for the Babauta administration.
Gov. Juan N. Babauta said he will give CUC back to the control of the CUC board of directors before he makes his exit in January 2006.
The utility firm has been under direct control of the Governor’s Office for six months.
ÅgWe have stabilized the power situation. I will be turning over CUC back to the board before I leave,Åh he said.
CUC board officials, particularly board chair Francisco Q. Guerrero and vice chair Herman Sablan, were kept updated of developments at the utility to ensure that the turnover would be smooth, he said.
Babauta also said that the outgoing administration would continue to help CUC meet its fuel payments. CUC needs to pay Mobil some $4 million for fuel purchases by December.
According to Babauta, the Executive Branch provides a subsidy of at least $1 million a month so CUC can meet its fuel payments. This does not include the $800,000 that the government pays every month for its utility consumption.
Because of the governor’s May 19 state of emergency declaration for CUC, the central government has been able to tap into all funding sources to address CUC’s financial problems.
The emergency has been extended six times, with the latest declaration to remain in effect through Dec. 16.
The justifications for the Nov. 16 extension were Ågthe uncertain financial condition of CUC and its ability to make all required fuel payments.Åh
Previous declarations were based on these two reasons, as well as CUC’s lack of Ågback-upÅh or reserve power generation capacity and the continued need to initiate critical maintenance and repair of power generation facilities.
CUC now has more than enough capacity to meet Saipan’s power demand. A significant portion of the repair needed at the island’s largest power plant has also been completed.
On Nov. 1, the utility firm voluntarily shut down Engine No. 1 at the Lower Base power plant for maintenance. It is expected to be back online by January 2006.
