The Commonwealth Utilities Corporation board of directors meet with CUC Executive Director Kevin Watson, and Chief Financial Officer Betty Terlaje on Monday.
THE Commonwealth Utilities Corporation is discussing a new memorandum of agreement with the Commonwealth Healthcare Corporation to address CHCC’s current utility charges, arrears and penalties, CUC Executive Director Kevin Watson said during a meeting of the CUC board of directors on Monday.
CHCC’s arrears now total $68.75 million, including penalties, CUC Chief Financial Officer Betty Terlaje said.
“We have been meeting with CHCC,” Watson said, “discussing how they can catch up with their arrears. CUC Chief Financial Officer Betty Terlaje is now preparing various options to submit to them for the [new] MOA,” he added.
“They must discuss with us how to proceed going forward, since the governor has signed the law to change their rates from government rate to commercial rate — that should enable CHCC to…start catching up on their arrears,” he added.
Recently, Gov. Arnold I. Palacios signed Public Law 23-30, which allows CHCC to pay the commercial utility rates for electricity, water and wastewater. Previously, CHCC was required to pay the much higher government rates.
“We need to schedule that meeting, and we need to finalize our proposed MOA and options for CHCC to pay their current billing charges and pay toward the arrears,” Watson reiterated. “It is my goal to get them to enter into an agreement, not just for one year, but for the duration to bring the arrears to zero balance.”
Under last year’s memorandum of agreement, CHCC agreed to pay CUC $525,000 a month. The MOA expired in May 2024.
“CHCC has previously alluded to the fact that, under a commercial rate, they would be able to pay going forward,” Terlaje said.
“At one point, they were paying half a million monthly…. They were thinking they were paying until May 2024 and that’s it. But they were paying for their March bill, so they fell short of one more payment under the [previous] MOA,” she added.
“We’re hoping to sign [a new] agreement for the same amount, pending changes to the law and cost of service study, that they would continue at half a million, and $278,000 will be for their current bill and the remainder would apply to their arrears,” Terlaje said.
Watson said he had proposed to reduce or eliminate the penalties if CHCC would enter into a new agreement and pay the past due amount.
“But they turned it down,” he said.
Terlaje said Watson’s offer is still on the table. “If they agree with some of the terms and conditions, we would give them options and…if they make payments for this amount, we would waive the penalties. Of course, if they default, the penalties would be put back in…. So that is something that we are considering just to give them an incentive to pay their arrears sooner than later.”
Terlaje said CUC will “present options to CHCC before we sit with them to discuss a new MOA. That is something that we have to send to them this week, and then whatever position they would offer us, we would put it in the MOA so that we can receive consistent payments. The new MOA will state that they will pay the current charges and the arrears; that is what we want to accomplish,” Terlaje added.
Under the previous government rate, CHCC was paying between $600,000 and $620,000 in monthly utility charges.
“With the commercial rate, CHCC will be charged monthly about $290,000 for their utility usage. So, they should be able to afford at least to pay their current charges until we can come up with an agreement with the arrears,” Terlaje said.
Variety was unable to get a comment from CHCC.
