CUC stays disconnection of service notice to CHCC

11/06/2025 – The Commonwealth Utilities Corp. board of directors voted to postpone a Nov. 10, 2025, disconnection of service notice to the Commonwealth Healthcare Corp. to allow further discussions on CHCC’s $30.6-million arrears.

In a special board meeting held last Nov. 5 at the CUC office in Dandan, all four board members present—chair Allen Perez, vice chair Donald R. Browne, Rebecca White, and Miranda Manglona—voted to stay the current disconnection notice to the hospital. The motion gives CUC management the opportunity to meet with Gov. David M. Apatang’s administration and CHCC leadership.

“We'll now leave it to management to go ahead and communicate with the secretary of Finance and CHCC to finalize this MOU,” said Perez following the vote.

The meeting with CHCC and the Apatang administration, set for this Friday, Nov. 7, is intended to finalize a new memorandum of understanding between CUC and CHCC to settle the hospital’s $30.6-million outstanding utilities bill. During the board meeting, it was revealed that CHCC has not been current with its $50,000 monthly payment under the existing MOU.

CUC said it last received a $50,000 payment from CHCC in July 2025.

Another condition for the temporary suspension of the Nov. 10 disconnection notice is that CHCC must bring its arrears current by paying the $150,000 owed for August, September, and October 2025.

The current MOU between CUC and CHCC calls for $50,000 monthly payments, but CHCC has often paid late or skipped payments altogether. CHCC recently told CUC management it could make its next $50,000 payment in December 2025 or January 2026.

“We do the memorandum of agreement, [then] a couple of months [later], they stop paying. And then when we give them again later, they'll pay a couple of months and then put it on the table again. So, we have to show CHCC that we mean what we ask. We are being bombarded with several new liabilities, right? So why do we have to keep giving CHCC the opportunity to play with us?” said Manglona.

CUC management recently met with Apatang and CHCC representatives, with the governor requesting the utilities corporation to hold off on the disconnection while he helps broker a new MOU between the two parties.

The framework for the new MOU would increase arrears payments from $50,000 a month to between $100,000 and $150,000 a month until the debt is cleared—a figure short of CUC’s request for $250,000 monthly payments.

The CHCC board had previously resisted increasing its monthly payment and sought legislative relief to retroactively lower its electricity rates from commercial to government classification—a move CUC said could violate federal law.

During discussions, Perez emphasized that CHCC’s chronic nonpayment affects CUC’s ability to maintain and upgrade its power generation systems.

Board member Simon Sanchez, meanwhile, suggested conducting an analysis to show how full repayment of CHCC’s $30.6 million debt could be used to purchase more efficient generators—potentially lowering the much-maligned Fuel Adjustment Charge and stabilizing power rates.

The former Guam lawmaker, who appeared electronically, added that CNMI ratepayers are effectively subsidizing the hospital.

“Whether we like it or not, that's sort of the economic reality. And we don't want to turn off the power of hospitals because you need the hospital. But that money's got to come from somewhere. But if we invested it properly, it would produce in two years, three years, four years, whatever [CUC executive director Kevin Watson] and the team would say—‘Hey, if I had access to $36 million, we could upgrade the system faster and produce a more reliable system at a lower cost,’” he said.

Members agreed CUC cannot wait decades for arrears repayment, noting that the hospital debt weakens CUC’s creditworthiness and burdens other ratepayers.

During the meeting, it was also disclosed that CUC is already pursuing a rate increase before the Commonwealth Public Utilities Commission to support a $60 million borrowing plan for new generators and infrastructure.

Report by Mark Rabago