THE Commonwealth Healthcare Corp. has requested the Commonwealth Utilities Corp. to calculate CHCC’s prospective bills and arrears using the commercial rate for water and non-residential rate for wastewater/sewer.
In a Jan. 11, 2021 letter addressed to CUC Executive Director Gary Camacho, CHCC legal counsel Nancy Gottfried stated that the “government” customer classification under which CHCC was billed for water and sewer does not exist according to CUC’s own regulations.
She said CHCC became aware of the rates on Dec. 10, 2020.
Gottfried said by statute, “CUC has to classify users of its utilities as ‘commercial,’ ‘residential’ or ‘governmental’ as CUC may determine.”
Citing relevant regulations, Gottfried said for wastewater/sewer services, CUC has determined that there are two classes of customers: residential and non-residential.
“Thus, by CUC’s own regulation, the government is equated with a commercial user. There is no government rate for wastewater or sewer services,” she said.
As for water, she said CUC has determined the classes to be commercial and residential.
But both commercial and residential users pay the same rate for the same level of usage, she added.
“Variation in the rate is due only to the amount of water used and whether the service is metered,” she said.
There is no government rate, Gottfried reiterated.
“Given that there has been no legal creation of a government classification for water and wastewater/sewer services, CHCC is requesting that all prospective bills and its arrears be calculated using the commercial rate for water and non-residential rate for wastewater/sewer services,” she said.
CHCC, however, does not dispute the government rate for its electrical usage.
Gottfried said, “CHCC acknowledges that there is a government customer classification for electrical rates.”
Following a CUC board-approved electrical disconnection, CUC and CHCC signed a payment agreement regarding CHCC’s utility bill.
According to the agreement, CHCC owed CUC a total of $34,087,471.31 as of Aug. 25, 2020, including a penalty of $10,238,146.53 that had accrued over the course of almost a decade since 2011.
Under the agreement, the 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.
CUC board chairwoman Miranda Manglona said CHCC and the CNMI government have been on track with the payments since the signing of the agreement in September.
As for the water and wastewater/sewer charges for CHCC, Manglona said the issue is still under discussion and “we are looking for a solution favorable to the agencies.”
The CUC board will meet with its CHCC counterpart on Jan. 26.
