CUC says payment of govt arrears will have good impact on consumer rates

With the CNMI central government paying off its arrears with the Commonwealth Utilities Corp., this will have a tremendously good impact on existing power and water consumer rates, according to CUC executive director Gary P. Camacho.

“It is true. They are current. It is exciting,” said Camacho when asked about Gov. Ralph DLG Torres’ announcement regarding the central government’s settling of its arrears with CUC.

At the State of the Commonwealth Address last Friday, Torres shared that, for the first time in decades, the central government settled its arrears with CUC, bringing all central government accounts current.

Eliminating over $1.9 million in arrears will enable CUC to reinvest these revenues in critical water infrastructure to meet the goal of providing 24-hour water service, Torres said.

Camacho said the central government and CUC have gone through a long process and this has resulted in the payment of a substantial amount of arrears. “We’re taking [that] money and re-investing it back in our operations,” he said.

He said re-investing the money gives CUC more leeway on consumer rates because CUC now has the revenue it needs to sustain operations.

“It is imperative that we sustain our operations. It is imperative that we do that through revenue from our sales,” he said.

Camacho said this allows CUC not to be too concerned with raising utility rates. “Now we are getting paid. It’s wonderful,” he added.

In February 2017, it was reported that the CNMI government entered a confidential settlement agreement with CUC to resolve CUC’s lawsuit against the government over non-payment of its $1.2 million debt.

With the settlement deal, Superior Court Associate Judge Joseph N. Camacho then dismissed CUC’s lawsuit.

Assistant attorney general Charles Brasington, counsel for the government, and CUC counsel Michael A. White, informed the court about the parties’ settlement agreement, resolving the lawsuit effective Jan. 1, 2017.

According to court records, in December 2013, CUC filed the lawsuit alleging that the government was indebted to the utility company in the principal sum of $1,241,137.86, together with pre-judgment interest. CUC alleged that the government breached their utility contract.