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CUC gets $2M subsidy
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Posted on Jan 04 2006
Residents may now breathe a sigh of relief, as power generation on the islands has been secured—at least for the next three weeks.
The Commonwealth Utilities Corp. disclosed yesterday that it received $2 million from the central government, allowing it to ensure Mobil’s fuel delivery today.
Mobil’s fuel tanker would arrive on Saipan from Singapore, according to acting CUC executive director Tony Guerrero.
“We received the money from the government. That will allow us to pay for the tanker [of fuel] tomorrow [today],” Guerrero said yesterday.
Guerrero said the tanker delivery would augment the power plants’ fuel stock by approximately 1.1 million gallons, which will sustain power generation on the islands for about 18 to 20 days.
When asked what the CUC would do next when the fuel stock runs out after 20 days, Guerrero said he would refer the matter to the utility firm’s board of directors, which should address the problem.
The CUC has remained dependent on government subsidy to sustain power generation even though Gov. Juan N. Babauta had already lifted in December the emergency declaration placing the utility firm under his direct control.
Since the week before Christmas, the government’s fuel cost subsidy has already totaled $3.5 million. Before the lifting of the emergency declaration in December, total subsidy had reached approximately $13.5 million, almost half of which was spent on fuel.
The government subsidy in the past weeks averted rolling blackouts during the holiday season. CUC initially implemented power load shedding last Dec. 20 and 21 but this stopped when the government stepped in.
CUC has been suffering from a cash flow problem, despite its average monthly collection of $6 million. The monthly collections include fuel surcharge on top of the cost of customers’ power consumption.
The transition committee for the CUC has yet to come up with recommendations to the incoming administration of governor-elect Benigno Fitial on how to solve the power crisis.
