Georgetown said among CUC’s obligations are for the sewerline project which was paid by the Commonwealth Ports Authority, and the payment to the contractor for the installation of the Agingan outfall.
“Many of the circumstances under which the obligations were assumed by CUC are not clear, resulting in lingering questions that have not been appropriately answered,” Georgetown said in its testimony to CPUC.
CUC has entered into a settlement agreement for the Agingan outfall and has asked for a retroactive approval from CPUC, Georgetown said.
“As structured, these debt issues place a large short-term revenue requirement on the wastewater system that is not reasonably balanced with the useful life of the facilities,” Georgetown said.
CUC Executive Director Antonio Muna, in his testimony, said CUC has sought CPUC’s approval of the $2.5 million settlement of a contract dispute over the sewage outfall for the Agingan sewage treatment plant.
CUC said the only way to pay for the settlement is through CUC rates, requiring CPUC approval.
Muna said CUC and the contractor, GPPC Inc., “have virtually completed the settlement document and are prepared to enter into a deal that would avoid years of very costly litigation.”
The U.S. Environmental Protection Agency ordered CUC to build a wastewater outfall at the plant site in Agingan after it was noted that the dispersal of the effluent was poor, which created an environmental hazard.
The final construction cost estimate at the time of bidding was $5.8 million.
Muna said CUC lacked the funds to pay for the project.
Only one qualified firm offered to construct the outfall, finance it and wait for the EPA’s reimbursement, he added, referring to GPPC.
The EPA provided $2.3 million to fund the project and approved GPPC’s contract.
But Muna said GPPC met a number of expensive problems during construction that delayed the project and resulted in significant extra costs.
