ASSISTANT Attorney General Tina Ngo, legal counsel for the Commonwealth Utilities Corporation, informed the federal court that the new Memorandum of Understanding concerning the utility arrears of the CNMI government and the Commonwealth Healthcare Corporation will be executed within this month.
In a status report filed on Wednesday, Ngo said that following the $10.9 million offset agreement entered into by CUC and the CNMI central government on Sept. 27, 2024, CUC’s outstanding balance on its 1% fee payable to the Office of the Public Auditor remains at approximately $8.1 million.
She stated, “CUC and the CNMI central government are poised to enter into a new MOU to offset $7.9 million still owed by CUC to OPA, to be credited toward CNMI accounts for monies owed to CUC for utility services.”
The execution of the new MOU is contingent on CUC first receiving an award of $3.9 million in Community Development Block Grant funds from the CNMI Department of Finance to assist with its cash flow, according to Ngo.
“CUC received the check yesterday, and the check is still processing. Once it clears, CUC will reach out to the CNMI central government to execute the MOU for a $7.9 million offset,” Ngo said.
CUC anticipates that the new MOU will be executed within the month, she added.
In addition, Ngo reported that, with CUC’s assistance, “the CNMI has been steadily transitioning its government agencies from using regular meters to prepaid meters.”
As for CHCC, Ngo said the corporation has stayed current on its bills and halted the accumulation of additional arrears after Public Law 23-30 was enacted, lowering CHCC’s utility rates from the government rate to the commercial rate.
“For the past six months,” she said, “CUC and CHCC have been engaged in good faith negotiations to enter into a new Memorandum of Agreement outlining a payment plan governing how the hospital will pay off its arrears.”
Ngo stated that CUC and CHCC are poised to enter into a new MOA, which provides that CHCC will make minimum monthly payments of $50,000 toward its arrears, in addition to staying current on its monthly bills. This MOA has been drafted by CUC and sent to CHCC for revisions and/or execution.
According to Ngo, CUC anticipates that the new MOA will be executed within the month.
Moreover, she reported that despite there currently being no MOA governing CHCC’s repayment of arrears, CHCC has already made two good faith payments of $50,000 each, while remaining current on its monthly CUC billings.
In November 2008, after the U.S. Environmental Protection Agency cited CUC for violations of the Clean Water Act and the Safe Drinking Water Act, the federal court issued Stipulated Orders 1 and 2.
SO1 focuses on CUC’s management structure, drinking water, and wastewater issues, while SO2 pertains to oil-related matters.
The stipulated orders require the parties to file regular status reports to the federal court.
At the status hearing on Thursday, designated NMI District Court Judge David O. Carter expressed his condolences over the passing of Gov. Arnold I. Palacios and acknowledged the ongoing tropical storm.
Judge Carter also noted that CUC’s proposed rate increases will be addressed in January 2026.
