Speaker: Bill to subsidize CUC in the works (mv-101107)

SPEAKER Oscar M. Babauta says the House of Representatives will explore the possibility of appropriating subsidies for the Commonwealth Utilities Corp. to cushion the impact of its projected revenue loss following the enactment into law of a bill lowering residential electric rates through the Legislature’s override. Babauta, Covenant-Saipan, was among the 16 lawmakers who voted in favor of overriding Gov, Benigno R. Fitial’s veto on House Bill 15-246, or the Act to Establish the Electric Charges and Rates for the Commonwealth Utilities Corp.He said the House will put together a subsidy package for the corporation.“We’re aware of that. We have been forewarned,” said Babauta referring to CUC’s claim that the override of H.B. 150246 would negatively impact its ability to provide continuous power to the islands.“Right now the House is putting together a financial subsidy plan for CUC,” he added.When asked where they will get the money, the speaker said: “In the bank.” He said local funds will be tapped but did not elaborate how.Babauta was at the CUC office yesterday.The governor earlier said the cash-strapped government has no spare money to subsidize CUC for its fuel expenses.The previous administration subsidized CUC’s fuel purchases up to $2 million a month. In a separate interview, Vice Speaker Justo S. Quitugua said the House will insert provisions appropriating subsidies for CUC in the proposed 2008 budget.“We discussed inserting that in the 2008 fiscal year budget,” he said.Quitugua said although FY 2008 officially began on Oct. 1 and technically the government’s spending level remains at $163.5 million in the absence of a new budget, lawmakers can still work on a budget for the current fiscal year.“Our agenda in the meeting (today) is the budget. We can still work on the fiscal year 2008 budget,” said Quitugua.He said conditions will be set for the proposed subsidy including that CUC be more transparent in its finances.He said he will draft legislation requiring CUC to make a quarterly public report explaining how it spends its money.

Crisostimo: CUC needs private sector’s help MV 100907

A SENATOR has prefiled a bill encouraging the Commonwealth Utilities Corp. to engage with the private sector in a partnership to provide its customers with a more stable power supply.The still unnumbered Senate bill is titled “CUC Private Sector Partnership Act of 2007.”Its author, Sen. Luis Crisostimo, D-Saipan, said the measure will give CUC corporate power to seek bankruptcy protection from its creditors.The bill asks the Public Utilities Commission to review and amend Section 2 of Public Law 15-12 which states that the Commonwealth Development Authority is authorized to write off CUC’s principal loan of $45.5 million subject to 50 percent repayment by an independent power producer should CUC privatize its power operations.Crisostimo, the chairman of the Senate’s committee on Public Utilities, Transportation and Communication, said CUC can only recover with the help of the private sector.He said about $75 million of CUC’s revenue goes to pay for imported diesel fuel.“Recovery is possible, but recovery requires assistance and support from the private sector. The commonwealth and CUC must commit themselves to successful models of public-private sector partnership,” the bill stated.“These models range from privatization of management through performance management contracts, as undertaken in Guam, to privatization of an entire utility service regulated by a Public Utilities Commission as is common in the 50 states. By taking advantage of one or more of these models, the commonwealth and CUC can draw on outside financing and expertise from the private sector to meet — and resolve — the power crisis,” the bill added.

Charles to prevent new law from applying to CUC

Press Secretary Charles P. P. Reyes Jr. said they are exploring legal means to prevent the new law from applying to CUC amid concerns that the agency will incur up to $8 million in potential revenue losses in a year’s time. OH THEY ARE SO FAST WHEN IT COMES TO HURTING CUC, BUT FOR THE RESIDENTIALS? WHO CARES LET THEM SUFFER.