CUC emergency declaration renewed

The state of emergency effectively suspends regulations and allows the government to reprogram funds to address cash, procurement, and hiring crises at CUC.

The cash crisis, Inos pointed out in his executive order, is primarily caused by the $12 million in arrears owed CUC by the Public School System, Commonwealth Healthcare Corp., and residential consumers.

That is on top of the $2.6 million in accounts payable that CUC owes vendors.

The declaration also noted that due to this cash flow problem, CUC usually has only days’ worth of fuel to power its grid “because it lacks the funds to buy oil from its sole, cash-only supplier.”

He also noted the financial woes of CUC is brought about by the “severe economically distressed time.” The past fiscal year alone saw the CNMI budget fall from $120 million to some $100 million.

“This has put a severe strain on the government to meet its obligation,” said Inos.

He also reiterated Gov. Benigno R. Fitial’s call in last month’s CUC emergency declaration that “a unified approach is necessary to reconcile and resolve the fiscal crisis of the government with the fiscal crisis of CUC.”

The acting governor also said CUC needs employees with specialized training and “there are many no-U.S. citizens [that] CUC needs to retain on technical and professional contracts.”

Without these positions filled, the utilities company’s operations would be severely compromised, he said.

Inos added that these non-U.S. employees with specialized training come in handy as CUC bears a “substantial obligation to deliver highly technical work on time to the satisfaction of the U.S. District Court and the U.S. Environmental Protection Agency, pursuant to two sets of stipulated orders.”

Failure to meet the requirements of the federal court’s orders could subject CUC and the CNMI to substantial fines and charges, and in the extreme, to federal takeover of their finances, he said.

With regard to the green energy issue, Inos said the utilities company went through requests for proposal for several energy projects, which would bring some relief to high utility rates. He said the emergency declaration would help complete these contracts as soon as possible “or the customers of CUC will continue to suffer from high oil prices.”

On the lack of CUC board of directors, Inos said the Executive Branch has “diligently tried to find board volunteers who meet the complex statutory qualifications” but has been unable to do.

The CUC was first placed under emergency status on Aug. 1, 2008; that was lifted only on March 28, 2011.

The latest emergency declaration for CUC was announced last May 18 and was renewed a month later, making Inos’ latest declaration the second for the embattled utilities firm.

Aside from the CUC, the Executive Branch also placed under a state of emergency the NMI Retirement Fund and the Commonwealth Healthcare Corp.

This has led Rep. Frank Dela Cruz (R-Saipan) to criticize the Fitial administration, saying that, instead of only those three agencies, the entire central government should be placed under emergency.