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‘PUC may need to act to resolve CUC-CDA debt’
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Posted on Mar 25 2009
The debt settlement agreement between the Commonwealth Utilities Corp. and the Commonwealth Development Authority will not be reached until a government entity demands a resolution, according to CUC.
CUC agrees with an earlier report by the Georgetown Consulting Group that, without a resolution to the debt agreement, CUC will not be able to access short- and long-term credit markets.
“The CDA matter needs to be resolved,” CUC executive director Antonio Muña said in pre-filed testimony to the Public Utilities Commission. “It will not be until a government decision-maker forces a decision. The [PUC] is such a decision-maker.”
The proposed debt equity conversion agreement between CUC and CDA would transfer $29 million in CUC preferred stock to the CDA so that it can address its longstanding debt.
The two agencies have been at odds over the loan, which affects CUC’s ability to borrow money and its plans for privatization.
The Georgetown report said CUC shows willingness to resolve the issue.
“However, CDA has not at this time expressed a willingness to have the PUC serve in a role to adjudicate this matter. In the meantime, the matter remains unresolved and CUC is effectively barred from capital markets,” the report said.
In his testimony, Muña said GCG fails to recommend action.
“If no one demands action there will be no action. The Commission may need to act,” he said.
The PUC will hold a public hearing on the debt and other matters on Friday at 1 pm in the Senate chamber.
