Aside from its discriminatory provision, House Bill 17-164 will also put MPLT funds at risk, MPLT Board of Trustees Chairman Alvaro A. Santos told Rep. Stanley T. Torres, Ind.-Saipan and chairman of House committee on Public Utility, Transportation and Communication.
Introduced by Vice Speaker Felicidad T. Ogumoro, Covenant-Saipan, H.B. 17-164 will transform CUC into an entity owned by people of Northern Marianas Descent and will allow MPLT money to be invested in it.
If H.B. 17-164 becomes law, the utility company will be known as the Northern Marianas Utility Corp.
Torres’s committee scheduled a public hearing in the House chamber last night to discuss the legislation.
Santos, in his letter to Torres, raised a number of concerns regarding the bill.
He first reminded the lawmakers of the $3.5 million that CUC still owes MPLT and the $4 million the CNMI government borrowed from MPLT in June last year.
Santos said MPLT’s experience with CUC shows that the utility agency “suffers from a lack of adequate capital which will likely be the case for the (proposed) NMUC.”
He also noted that the amount of receivables, including that of the government accounts, “is very high” suggesting that the legislation may not resolve the utility agency’s cash flow problems.
“We do not see where the establishment of NMUC provides any solution to the CUC financial situation or resolves the issue of providing stable utility services at a reasonable cost. More likely than not, it will increase these problems,” Santos told Torres.
Santos also said that MPLT is concerned about the possible loss of federal grants once NMUC becomes a “for-profit” entity.
CUC, he noted, is under the stipulated orders lodged in federal court by the U.S. Environmental Protection Agency and the U.S. Department of Justice
The federal court, he said, has indicated that as long as CUC moves forward with the projects in compliance with the orders, penalties may not be applied.
“What then would be the result, if any, on the occasion of the establishment of NMUC as a for-profit corporation? Would the shareholders and management be capable of assuming this stipulated orders or would the CNMI government be charged with seeing obligations through with EPA?”
Santos asked, as he also expressed fear about the possibility of receivership as an unintended consequence of the measure.
H.B. 17-164’s provision that allows MPLT earnings to be considered shares is also discriminatory, Santos said.
The language of such provision, he added, suggests that shareholders who are NMDs would receive MPLT distributions themselves and directly — to the exclusion of the rest of non-shareholder NMDs and other non-NMD shareholders.
He said there is nothing in the CNMI Constitution that allows MPLT interest to become NMD shares in a for-profit corporation.
