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CUC working to meet requirements of stipulated orders
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Posted on Feb 20 2009
With the Commonwealth Utilities Corp. working against the clock to comply with federal stipulated orders, the utility agency has several projects that need to be completed if it does not want to incur daily fines.
In November, the U.S. Department of Justice and the Environmental Protection Agency filed a civil suit against CUC, claiming the utility agency has committed violations against the Clean Water Act and Safe Drinking Water Act. The suit was accompanied by two stipulated orders, which means that the CNMI government agreed to the terms and conditions being required of it by the EPA. The requirements set completion dates—some within 30 days—that the utility agency must meet or get fined thousands of dollars each day. The comment period for the orders has ended, but U.S. District Court for the NMI has not signed off on the orders so the time frame has not started yet.
Of the two projects that must be completed within 30 days, one—a schedule of the closing of the Tanapag and Achugao springs—is 90 percent complete and another project—testing for bin classification on the three islands—is 50 percent complete. The testing will cost $100,000, according to a presentation presented to members of the Legislature by Bruce Megarr, CUC deputy director for the Water and Sewer Division, yesterday. Of the projects that must be completed within 90 days, some have been completed. CUC is allowed two years for some projects—such as cleaning the entire sewer pipe system.
According to the presentation, the cost incurred for 2009 to complete the necessary projects is $5.8 million. For 2010, the cost decreases to $3 million and in 2011 it drops to $2.8 million.
The biggest hurdle to meeting the orders is the budget, Megarr said. For fiscal year 2008, revenue was about $6.3 million while expenses were about $9.9 million, a shortfall of $3.6 million. The numbers are unaudited.
Water rates have remained unchanged for the last 15 years and sewage rates have decreased, Megarr said.
The best way to proceed, according to Megarr, is to use the current rate structuring efforts underway by the Georgetown Consulting firm and define the marginal cost of each deliverable.
