CUC state of emergency lifted

Gov. Juan N. Babauta is ending the seven-month state of emergency and returning management of the Commonwealth Utilities Corp. to its board of directors, effective Friday.

Without the state of emergency, the Governor’s Office will no longer have the authority to reprogram funds from other government services to subsidize CUC’s fuel purchases and other expenses.

According to the administration, two tankers are due to deliver power generation fuel on Jan. 8, 2006. CUC needs about $6.8 million to pay for the oil shipments.

Yesterday, Babauta reported that the government paid CUC $1 million last week. It is expected to make another payment of $500,000 to the utility firm this week. The governor estimated that the government could raise only up to $2.5 million for CUC by the end of this month.

Babauta added that it was now up to the next administration to find the money to help CUC pay for fuel and keep the lights on.

In a separate interview, Gov.-elect Benigno R. Fitial said that Babauta could not pass on the problem to him, as he would not be in office until one day after the delivery had been made. “I’m not in the position to do anything about it right now,” Fitial said.

He also said he would not follow Babauta’s example in declaring a state of emergency when the power system almost collapsed due to its inability to pay for fuel. Rather, he would ask the Legislature for reprogramming authority to subsidize CUC, Fitial said.

He also stood firm that he would scrap the fuel surcharge. But he refused to provide assurance that utility rates would not be raised, after his administration completed its review of the existing utility fee schedule.

In a public briefing yesterday, Babauta said he decided to end the state of emergency for two reasons.

“First, the Commonwealth is no longer threatened by a catastrophic collapse of the utility system,” Babauta said. “The second reason is out of respect for the incoming administration. They will have their own ideas and plans for keeping the utility running and the Commonwealth safe. So I want to leave CUC in the management status provided by law and not in a state of emergency.”

Babauta declared CUC under a state of emergency on May 19, 2005 mainly because of CUC’s lack of a fuel supply contract. A two-year contract was negotiated and signed with Mobil in just a few days.