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House panel: CUC loan of over $5M should be approved by law
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Posted on Oct 11 2011
By Haidee V. Eugenio
Reporter
Reporter
A House committee that reviewed a bill requiring the Commonwealth Public Utilities Corp. to approve loans made by the Commonwealth Utilities Corp. in excess of $500,000 also recommends that CUC loans of over $5 million “must be approved by law” to prevent multiple reviews.
The eight-member House Public Utilities, Transportation and Communications Committee chaired by Rep. Stanley Torres (Ind-Saipan) recommended passage of House Bill 17-205 as House Substitute 1. Torres is also the author of the bill.
The Legislature has empowered CPUC to regulate CUC, the sole electricity supplier to the CNMI government including all public safety activities, schools and the only hospital.
The House PUTC Committee said approval of loans should rest in the hands of CPUC, which has oversight over CUC.
“The CPUC is the proper body to consider CUC’s financial position and analyze the terms of any loan available to CUC. In addition, the Legislature believes that CUC must be enabled to conduct its business without multiple reviews, and a review by both the CPUC and the Legislature would be duplicative and could damage CUC’s ability to move forward expeditiously with any loan for which it might qualify,” the committee said.
The panel said it agrees with the HB 17-205, HS1’s intent to repeal Executive Order 8-9 to reflect that any borrowing CUC wishes to attempt in excess of $500,000 but not exceed $5 million must be approved by CPUC.
In excess of $5 million must be approved by law, the committee said.
The panel added that the enactment of HB 17-205 will strengthen CUC’s maintenance programs and stave off short- and long-term mechanical problems and breakdowns.
“This will potentially save CUC hundreds of thousands of dollars in ’emergency’ mechanical repairs which will subsequently save CUC customers the extra charges to make these costly repairs,” Torres’ committee added.
Of the eight House PUTC Committee members, only seven signed off on the committee report. The House has yet to schedule its next session to act on this committee report.
