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CUC posts $19M loss in FY 2005
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Posted on Feb 20 2006
The Commonwealth Utilities Corp. sustained a deficit of almost $19 million last fiscal year, due largely to the skyrocketing cost of fuel.
According to CUC’s unaudited financial statement for FY 2005, the utility earned total revenues amounting to $84.47 million. CUC’s expenses totaled $103.33 million between October 2004 and September 2005.
This resulted in a net loss of $18.86 million.
CUC data showed that the utility firm collected $82.21 million in operating revenues last year. This represents a 15-percent increase, which resulted from the implementation of the fuel surcharge and government subsidy.
CUC’s FY 2005 operating revenues include $70.35 million for the delivery of power service, $9.66 million for water service, $2.19 million for sewer service.
In addition, CUC received $847,780.66 in capital contributions and $1.41 million in miscellaneous income.
The utility’s income however proved insufficient to cover all its expenses, especially with the price of fuel increasing by 50 percent from FY2004.
From $39.77 million in FY2004, the cost of production fuel soared to $59.05 million in FY2005.
Overall, CUC’s operating expenses amounted to $91.53 million, including $15.6 million for personnel and administration and $5.41 million in maintenance.
On top of this, CUC incurred $11.8 million in non-operating costs such as interest payments, public auditor’s fee, and miscellaneous expenses.
In its FY 2006 budget, CUC allocated $51.56 million of the total budget for fuel. The fuel budget represents an increase of $16.51 million or 46.8 percent, as compared with FY 2005, and an increase of $20.70 million or 66.6 percent as compared with FY 2004 budget.
CUC signed effective May 1, 2005 a contract granting Mobil Oil Marianas an exclusive right to provide fuel to the power plants for two years.
According to the contract, the price of fuel would be determined monthly based on the price of oil at the date of purchase plus delivery charges. CUC must buy a monthly average minimum of 2.25 million gallons of fuel for Saipan during the first year. The minimum volume of purchase for Tinian is 330,577 gallons a month. For Rota, the average minimum is about 90,000 gallons monthly.
