THE Commonwealth Utilities Corp. has denied the Commonwealth Healthcare Corp.’s six-month payment extension request.
In a letter to CHCC Chief Executive Director Esther Muna, CUC Executive Director Gary Camacho said CHCC’s request was discussed by CUC’s management and board of directors at its regular meeting on Sept. 3, 2021.
“Though CUC acknowledges CHCC’s efforts to comply with the agreement over the past year, in considering your request, CUC bears in mind CHCC’s outstanding arrearages that continue to accrue every month. CUC also considers CHCC’s long-standing history of non-payments to CUC over the past years,” Camacho said.
CUC also considered the thousands of residential and commercial customers who are not afforded the same leniency given to CHCC, he added.
“As you know, CUC’s residential and commercial customers range from village households to small business, all of whom are subject to disconnection if such entities fail to pay the monthly utility bill after proper notice. These same customers continue to subsidize CHCC’s monthly utility bill, despite CHCC’s demonstrated noncompliance to stay current with its monthly utility obligations over the course of more than 10 years,” Camacho said.
According to CUC, CHCC’s total arrears amounted to $39.28 million as of Aug. 22, 2021.
Camacho said this is an increase of $3 million despite a 12-month payment agreement in which the CNMI government has paid the majority share of $150,000 a month to assist CHCC, which, he added, has only made minimal monthly payments of $69,000.
“As CHCC has noted,” Camacho said, “additional consent from the CNMI [government] is needed, but at this time, it is unclear whether the CNMI will continue to assist CHCC comply with the agreement.”
He said CUC “respectfully denies” CHCC’s request for a six-month extension of the agreement.
But noting CHCC’s commitment to negotiating in good faith a final resolution to address all outstanding amounts, Camacho said CUC proposes periodic one-month extensions, granted upon request, beginning at the end of the Sept. 11, 2021.
“CUC posits that this alternative will keep the parties actively engaged in seeking resolution of CHCC’s outstanding balance that continues to accrue,” Camacho added.
CUC and CHCC signed a payment agreement in September 2020.
According to the agreement, CHCC owed CUC a total of $34.087 million as of Aug. 25, 2020, including a penalty of $10.23 million that had accrued over the course of almost a decade since 2011.
Under the agreement, CHCC’s payment will remain at a minimum of $219,000 per month unless there is an increase in CHCC’s consumption or a rate increase in the Fuel Adjustment Charge or FAC.
If CHCC misses its payment after 30 calendar days, CUC will disconnect CHCC’s utility services pursuant to Title 50 of the Northern Mariana Islands Administrative Code.
