For wastewater, CUC is projecting to get only $1.6 million for 2010, which will result in a $5.2 million shortfall.
In the interim financial plan submitted to the U.S. Environmental Protection Agency, CUC deputy director for water and wastewater utilities Bruce Megarr said the shortfall will be funded through the action of the Commonwealth Public Utilities Commission.
For 2011 and 2012, wastewater revenues are projected at $6.4 million every year but expenses for the same period will vary — $5.5 million in 2011 and $6.2 million in 2012.
The plan includes a detailed cost and revenue analysis from 2010 to 2012 as well as the breakdown of costs.
In the report, Megarr said traditionally there had been a significant “disjoint” between CUC’s annual budgeting process and its fiscal realities.
“Revenues often do not meet expectation while line items within budgets often are either underfunded or ignored completely,” he said.
Megarr said there’s a CNMI law which calls for the preparation of a “balanced budget” by CUC, and the submission of the interim financial plan will meet local rules and the federal stipulated orders’ requirement for proper fiscal planning.
He said the revenue requirements have been partially addressed by providing a “cross-subsidy” between CUC’s power generation revenues and water and wastewater operations.
The cross-subsidy scheme includes the reduction in electrical costs and administrative fees for water and wastewater operations, which will reduce the electric and administrative costs from 80 percent in 2010 to 40 percent in 2012.
“Full cost recovery is expected in 2014,” Megarr said.
Electrical costs are calculated separately for water and wastewater using horsepower/voltage conversion formulas, he added.
“It is our goal to meter each water and wastewater facility to accurately account for electrical usage.”
