‘CNMI opposes CUC receivership’

Gov. Eloy S. Inos made clear to lawmakers yesterday afternoon his administration’s plan to oppose the U.S. Environmental Protection Agency’s request for the federal court to appoint a receiver to implement some of the Commonwealth Utilities Corp.’s projects, among other things.

Lawmakers backed the governor’s position during a closed-door meeting that was also joined by CUC executive director Alan Fletcher on Capital Hill.

EPA had also asked the court to find CUC in breach of stipulated court order and in contempt—something that the CNMI government also opposes.

House Ways and Means Committee chair Tony Sablan (Ind-Saipan) and House Public Utilities, Transportation and Communications Committee chair Larry Deleon Guerrero (Ind-Saipan) agreed with the governor that the delays in the completion of court-ordered projects for CUC were the fault of CUC contractors “and not CUC or the CNMI government.”

“The government is going to oppose EPA’s petition for CUC receivership,” Sablan said after emerging from the meeting with the governor.

Sablan said the government wants to avoid receivership, which could eventually raise further the utility rates for CUC customers.

The Ways and Means chairman said “funding is not an issue” regarding the petition for receivership.

“The pipeline and tank projects are funded by federal grants and funding is still there,” Sablan said. Besides, there’s also a contractor bond, he added.

He said the CNMI government believes the leftover funding and contractor bond will more than suffice to complete the delayed CUC projects.

“We hope the court will agree with us, not to move ahead with receivership,” Sablan added.

EPA is not seeking the appointment of a receiver for CUC generally—at least for now—but someone who will take charge of implementing the court’s stipulated order No. 2.

Stipulated Order No. 2 focuses on oil issues such as repairing and replacing infrastructure, managing tanks and pipelines, as well as spill prevention and response.

House PUTC’s Deleon Guerrero, for his part, said the CNMI government believes there’s enough grounds to reject a motion to place some CUC projects under receivership.

“It’s not really our fault that the project has been delayed. It’s the lack of action by CUC’s contractor,” Deleon Guerrero said. Like Sablan, Deleon Guerrero said grant money for the projects is intact and there’s bond money by the contractors.

Rep. Ralph Yumul (Ind-Saipan), who was also at the meeting with the governor, said he, too, opposes placing certain CUC programs under receivership “because it will hurt all of us in the end as far as ratepayers are concerned.”

He said he attended the meeting with the governor to listen to the administration’s plans, “put politics aside and do what it takes to correct stipulated orders for the tank and pipeline [projects].”

“When a receivership happens, we have to put funding upfront and that’s funding we don’t have. So as a member of the Legislature, we need to come together and work with the administration,” Yumul added.

Funding for CUC

While funding for these CUC projects is not the major issue, lawmakers acknowledged that the government and its agencies need to pay their unpaid utility bills to CUC.

That will ensure CUC properly maintains and operates its facilities and equipment and provide much better and reliable services.

Currently, the Public School System, the Commonwealth Healthcare Corp., the central government, and other agencies owe CUC over $20 million in unpaid utility bills. This is in addition to millions of dollars that residential users also owe CUC.

Sablan said the Inos administration is asking the U.S. Department of the Interior’s approval in funneling capital improvement project, or CIP, money to CUC.

He said that is a “strong indication” that the government is helping to fund CUC.

Deleon Guerrero, for his part, said among the governor’s suggestions is to apply for a “loan” from the Marianas Public Land Trust “to pay off a bit of PSS, CHCC debts” to CUC.

“And I support him on that,” the PUTC Committee chair added.

As to other lawmakers’ suggestion that the administration request Saipan casino developer Best Sunshine International Ltd. to use $10 million in utility vouchers instead to help fund CUC, Deleon Guerrero said the governor didn’t want to dwell on this as Best Sunshine is currently dealing with land issues.

Also at the meeting was Rep. Mario Taitano (Ind-Saipan).

Rep. Ray Tebuteb (Ind-Saipan) also earlier suggested tapping the next $15 million annual casino license fee to fund CUC.