Commonwealth Utilities Corp. chief financial officer Betty Terlaje warned that a worsening liquidity crisis is slowing Rota's recovery from Super Typhoon Bavi and could eventually jeopardize utility operations across the Commonwealth, highlighting what is at stake if CUC does not secure authority to borrow up to $40 million through a proposed line of credit for emergency fuel procurement and infrastructure restoration.
Appearing before the Senate Public Utilities, Transportation and Communications Committee last July 14, Terlaje said CUC's greatest challenge is no longer manpower or mutual aid but the lack of financing needed to accelerate restoration.
"Today the greatest obstacle to restoring power is no longer the dedication of CUC employees or the willingness of our mutual aid partners. It is the lack of financial authority to act."
She said every day emergency financing is delayed prolongs outages for residents, businesses and critical facilities throughout the Commonwealth.
"Rota needs immediate resources. Saipan and Tinian continue to recover. Yet the financial burden of restoring all three islands has been placed almost entirely on CUC. That burden should not rest solely on one public utility and its ratepayers. This was a Commonwealth-wide disaster and it requires a Commonwealth-wide response."
Terlaje emphasized that CUC is not seeking a bailout but authority to borrow funds that would be repaid through future utility revenues and anticipated federal disaster reimbursements.
"CUC is not asking for a bailout. We are asking for the authority to borrow so we can do our job."
She also told senators the utility is stretching its remaining cash by prioritizing fuel, payroll and critical restoration expenses while carrying more than $8 million in unpaid vendor obligations. Without a cash infusion, she warned, vendors could eventually stop providing fuel, services and materials needed to continue restoration.
CUC electrical engineer Jonathan Camacho outlined the extent of Bavi's damage to Rota's electrical system.
“Rota has sustained damages to their power distribution infrastructure. One hundred seventeen power poles are down, 72 damaged transformers and over 20,000 feet of conductors are down."
Camacho said damage assessments have been completed and reimbursement requests are being prepared, but replacing the damaged infrastructure depends on obtaining funding. He added that some materials originally intended for Saipan's Sinlaku recovery may have to be diverted to Rota, temporarily slowing restoration on Saipan.
CUC board chair Allen Perez told lawmakers the utility now expects the combined recovery cost from Super Typhoons Sinlaku and Bavi to approach $100 million, with Sinlaku alone estimated at roughly $75 million.
"The total cost of recovery for both typhoons can easily approach $100 million."
Executive director Kevin Watson later warned that if CUC's financial situation continues to deteriorate, the utility may have no choice but to implement load shedding before ultimately running out of fuel.
Watson said the effects would extend beyond residential customers to government agencies and critical facilities that depend on CUC's electrical system, including the Commonwealth Health Center, the Commonwealth Ports Authority, schools, and public safety operations.
"No fuel means that we don't pump water and there's no flushing. There's no drinking water and there's no toilets."
He said the consequences would ripple throughout the Commonwealth.
"The economy would die. The government would come to a halt. The safety, public safety would be an issue. Schools would close down."
Before adjourning the hearing, PUTC chair Sen. Manny Gregory T. Castro said the committee had received "valuable information" that would help senators determine the appropriate course of action on the proposed emergency financing measure and CUC's ongoing recovery efforts.
In a social media post following the hearing, Rep. Vincent S. Aldan said he opposed providing additional financing to CUC without greater accountability, arguing the utility should first undergo an independent audit and improve its collection efforts.
"It's crazy how CUC wants monies, yet they don't want to submit to a full audit," Aldan wrote.
He also questioned what cost-cutting measures, operational reforms, and protections for ratepayers CUC has implemented, concluding, "So no, I don't support financial bailout (because that is what it is, but of course CUC don't want to admit that), unless an independent audit is done! The people [have] a right to a 100% audit of CUC, that they own, before they're asked to pay more!"
Aldan also criticized CUC's handling of delinquent accounts and accused the utility of mismanagement, using profanity in the post.
Share this article:
