CNMI School System’s Electricity May Be Disconnected

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CNMI School System’s Electricity May Be Disconnected Education commissioner approaches senators for help

By Emmanuel T. Erediano

SAIPAN, CNMI (Marianas Variety, May 14, 2013) – The Northern Marianas Commonwealth Utilities Corporation (CUC) will disconnect the Public School System (PSS) on June 22, leaving schools without power during the summer break.

Education Commissioner Rita A. Sablan and other PSS officials yesterday asked senators to see what they could do to convince CUC to hold off on the disconnection.

But in his disconnection notice to PSS yesterday, CUC chief financial officer Charles Warren said they were actually supposed to disconnect PSS yesterday. CUC postponed the disconnection until June 22.

PSS owes CUC a total of $4.9 million. About $4 million is owed as of fiscal year 2012 and close to $900,000 is owed for the current fiscal year.

"Given the status of the PSS utility accounts and the continued growth of the balance due, CUC is compelled to disconnect services," Warren told PSS financial director George Palican.

"As a courtesy to PSS, disconnection will be postponed until Saturday, June 22, 2013. Based on the PSS calendar, this is after the graduation and promotion ceremonies," he added.

But according to Palican, PSS is paying its current bills. It has paid CUC a total of $1.5 million for its monthly bills from October 2012 to March 2013. Palican also said that they are ready to pay the $145,425 April bill this week.

Although PSS has been paying its monthly power bills in full, it has arrears for water charges so the total expenses PSS incurred for power, water and wastewater for FY ’13 was $2.5 million. And because PSS has paid CUC only about $1.5 million, the balance for the current fiscal year is a little over $1 million.

In his reply to CUC, Palican said the utilities agency’s decision to terminate service on June 22 "is distressingly bad news for PSS."

"PSS has been hampered for many years by a lack of adequate funding to address school and central operations, and CUC bills at the same time," Palican added.

Last year, PSS told the then-Fitial administration that it needed $4 million to pay CUC but it only got $3 million for utilities in its FY 2013 budget.

Palican said that during FY ‘13, PSS tried to make payments to CUC each month. Although in recent months, they could only pay the power bills, at least PSS did make a payment each month.

In the current fiscal year, PSS was given $2.3 million for utility expenses: power, sewer and wastewater.

Based on a document obtained by Variety, for the first six months of the current fiscal year which began Oct. 1, 2012 the school system’s utility expenses already totaled $1.945 million which meant 84 percent of the total CUC budget for the school system had already been expended. This leaves PSS only $357,072 for the remaining six months to pay for its utilities.

In the last four years, PSS has pleaded with lawmakers to increase funding for utilities to $4 million, to cover the cost for 19 public elementary, junior high and high school campuses, the central office and the 10 Head Start Centers on Saipan, Tinian and Rota.

Sablan brought this up with Senate Fiscal Affairs Committee Chairwoman Jovita M. Taimanao, Ind.-Rota, and Senate President Ralph DLG Torres, R-Saipan, during a budget meeting in the Senate chamber.

She told the senators that since the beginning of the current fiscal year, PSS has been paying its power bills.

"It is unfortunate that PSS continues to pay such very high rates," she said expressing the hope that the House will support a Senate proposal to lower the utility rates for PSS. She was referring to Senate Bill 18-7 which would cut the water rate for PSS by 98.4 percent and the wastewater rate by 95.6 percent.

But Sablan also asked Taimanao to tell CUC "it’s unfair to disconnect the schools."

PSS financial consultant Ed Tenorio told the senators it is grossly unfair to disconnect PSS when it has been paying its current bills.

In an interview after the meeting, Taimanao told Variety that she understands the disconnection next month is the biggest challenge that PSS is facing right now.

Her committee, she said, will call in CUC officials "to see how we can work together and negotiate."

"We can compromise instead of cutting off PSS," she said.

Taimanao and Sen. Pete P. Reyes, R-Saipan, are co-authors of the Senate bill that reduces utility rates for PSS. The main author of the bill is Senate President Ralph DLG. Torres.

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