SAIPAN – Representative Vincent “Kobre” Aldan said the Commonwealth Utilities Corporation should not be allowed to tap customer security deposits to address its latest financial emergency without first completing an independent utility audit and providing a full public accounting of how previous deposit funds were used.
In a public statement issued Friday, the Precinct 1 lawmaker said the use of ratepayer deposits as a bailout mechanism is unfair, unreasonable and inconsistent with responsible governance. He called for the comprehensive audit proposed under House Bill 24-88 to move forward before any new bailout authority is approved.
“CUC’s emergency may be financial. The people’s emergency is trust,” Aldan said.
Aldan said customer security deposits are not operating revenue. Under 4 CMC ยง 8143(b), residential security deposits are required to be placed in an interest-earning trust fund, are not to be used for any other purpose, and must be refunded within 30 days after disconnection along with earned interest.
Aldan said any proposal to use deposit funds for fuel would mirror Public Law 16-2, which during the FY2008 emergency allowed CUC to use up to 50 percent of residential security deposit funds for fuel expenses, with a requirement that the funds be returned within three years. Before authorizing a similar move, Aldan said CUC should be required to show what happened to the deposits used under that earlier authority.
Among the questions Aldan said CUC should be required to answer before any deposit is touched: a full accounting of all customer security deposits, proof that any prior security-deposit funds used for fuel were repaid, the interest calculation owed to customers, a customer-by-customer deposit ledger, the current trust-fund balance and evidence that every ratepayer’s deposit remains protected.
Aldan said he is not suggesting CUC’s bills should go unpaid.
“Fuel must be paid for. Power must stay on. Water and wastewater services must continue,” he said. “But the question is not whether CUC needs money. The question is whether the people should continue paying for a system that refuses to prove where the money went, why the emergency keeps repeating, and who is accountable for fixing it.”
Aldan said ratepayers should not be forced to subsidize mismanagement, weak collections, poor controls, unverified fuel costs, unpaid government accounts and repeated emergency decisions that have not produced permanent reform.
The independent utility expert audit proposed under HB 24-88 would cover cash management, accounts receivable, billing accuracy, collections, accounts payable, disbursement controls, fuel and power cost processes, procurement, contract administration, inventory, capital projects, operational performance, water losses and asset verification, Aldan said.
Sections 106 through 108 of the bill would require a Commonwealth Public Utilities Commission docket review, a written management response, a corrective action plan, quarterly progress reports and a public audit implementation dashboard. Section 111 establishes compliance consequences including default notice, restricted discretionary spending while in default and personal civil penalties that may not be recovered through rates, the Fuel Adjustment Charge, surcharges or other ratepayer charges.
“HB 24-88 does not give CUC a blank check,” Aldan said. “It does not create another bailout. It does not shift more burden onto ratepayers. It demands answers.”
The bill also requires a management letter, a validated asset register, a plain-language executive summary, a CPUC briefing exhibit, a ratepayer impact matrix and a “Top 10 Controls to Fix in 90 Days” list. The corrective action plan would require specific actions, responsible owners, deadlines, measurable outcomes and verification methods.
“A bailout asks the people to pay first and ask questions later,” Aldan said. “An audit demands the truth first, then builds the solution.”
Aldan said before any customer security deposit is used and before any new bailout is approved, the Commonwealth should require an independent utility expert audit, full public disclosure, a verified corrective action plan and strict protection of ratepayer funds.
“Ratepayers are not the bailout,” Aldan said. “Ratepayers are the people CUC exists to serve.”
