CNMI Hospital Reaches Agreement To Pay Overdue Utility Bill

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Pacific Islands Development Program, East-West Center With Support From Center for Pacific Islands Studies, University of Hawai‘i

CHCC owes CUC $14 million; to develop solar energy project

By Mark Rabago

SAIPAN, CNMI (Saipan Tribune, Dec. 24, 2015) – The Commonwealth Healthcare Corp. and the Commonwealth Utilities Corp. have signed an agreement to finally address the $14 million the hospital owes the utilities company. It also calls for the Commonwealth Health Center—with CUC’s assistance—to develop a photovoltaic system for its future power needs.

The Net Metering Intergovernmental Cooperative Agreement establishes the relationship between CHCC and CUC on net metering and the development of photovoltaic renewable energy for the hospital.

Under the deal, CHCC will initially pay CUC $250,000 to settle part of the $14 million it currently owes the utilities company. The hospital will also be on the hook for minimum monthly payments of $150,000 until such time the solar power system is up and running.

As a condition of the newly inked deal, CHCC is mandated to raise its monthly payments to $300,000 in the event it is unable to complete its photovoltaic system project by the deadline set by the deal.

CHCC’s annual power consumption averaged $5 million in 2012 and 2013 and the rationale for adopting renewable energy sources is to bring that number down to affordable levels.

The agreement allows CHCC to pay off a portion of its arrears while pursuing alternative energy so it could someday become independent from the CUC power grid and use CUC as backup.

Acting governor Ralph DLG Torres presided over the historic signing of the agreement between CHCC, represented by its CEO Esther Muña, and CUC, represented by board of directors chair Adelina Roberto.

"Throughout the last year there’s been communication going back and forth to settle the arrears and have a future plan for the hospital as a self-sustaining entity with their energy needs. [Now] there’s an agreement and I hope everybody’s happy. Everyone told me this is the best gift for Christmas for everybody… This is an assurance for all the patients that they won’t be worrying [about brownouts at the hospital]," said Torres.

He said the agreement allows CHCC to become more financially stable so that it can better address the health concerns of the CNMI community, while lessening the financial impacts on CUC.

"This will ultimately reduce the cost of power and utility expenses for every single ratepayer in the Commonwealth in the long term."

He said the agreement could also serve as a model for other government agencies that still owe CUC, adding that the central government itself owes CUC some money.

"After we take care of this issue I will be here again and we will go back to square one. We’re going to make things work as we’ve had here," he said.

Muña thanked CUC for working with CHCC to finally resolve its years-long inability to pay its power bills.

"Thank you to the board and management of CUC and also to their counsel, James Sirok. Thank you for coming to the table with us and mak[ing] this agreement [possible]. I know we’ve been a burden. I mention in meetings before that you guys are always there for us and we understand that you need help, too. I don’t want to be a continued burden to you guys and I want to help out," she said.

Muña said the bottom line is CHCC has financial issues and it cannot really pay for its monthly utility expenses. Coming up with the NMICA agreement would at least get the ball rolling and both CHCC and CUC can move forward, she said.

"About 30 percent of our patients really cannot pay. Patients came to CHC to have their oxygen tanks run after Soudelor. Continuing to serve the indigent patients is important to us and we appreciate what CUC is doing for us," she added.

Roberto said she wants the NMICA agreement to work.

"Help us so we can help you so we can help everybody. This [agreement] ultimately will give consumers the lowest rate possible. We just pass through whatever good comes to us."

The CUC chair also urged CHCC to sustain its power conservation measures, which elicited an immediate reply from CHCC facilities administrator Warren Villagomez, who said they expect to have power consumption down another 30 percent in the coming months.

CUC Power Division manager Gary Camacho said it’s important that both parties follow what’s outlined in the NMICA agreement.

"It took some time because there were technical things that had to happen. We have consumers that we need to provide essential services to. It’s good that we collaborated on an agreement where both agencies can move forward. This will have a significant impact," he said.

Sen. Sixto Igisomar (R-Saipan), who was also present during the signing of the agreement, gave credit to CUC for entering into an agreement with CHCC to finally stabilize the power needs of the Commonwealth’s lone hospital.

Also present during the meeting were CHCC Project manager Dr. Norman Nakamura and CHCC legal counsel David Lochabay. Torres also acknowledged both for their work in the hammering of the deal.

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