CNMI's utility body eyes borrowing, warns of systems collapse due to depleting cash and fuel reserve
- Admin
- 3 hours ago
- 3 min read
By Bryan Manabat
Saipan- The Commonwealth Utilities Corp. is proposing to resort to borrowing amid its depleting cash and fuel reserves as the CNMI struggles to recover from Typhoon Sinlaku while reeling from the impact of war in Iran.
Seeking immediate legislative rescue, Betty Terlaje, the CCU's chief financial officer, warned that the CNMI faces cascading failures across power, water, wastewater, communications and public safety systems.
During the CUC board of directors' special meeting on May 21, Terlaje presented the utility’s post‑typhoon financial condition and recovery status.
She reported that the CUC has incurred $18.3 million in disaster‑related expenses in just 37 days, and total recovery costs are expected to reach or exceed $75 million within the 90‑day emergency period.
Only $14.5 million of CUC’s cash is unrestricted and that amount is already obligated for incurred expenses.
The remaining $35 million is restricted to grants, ARPA projects, customer deposits, stipulated projects and settlement funds.
The presentation stated that “available cash is insufficient to sustain operations, fuel procurement and recovery obligations over the coming months.”
Supertyphoon Sinlaku, a Category 5 storm, caused massive blackouts when it swept over Saipan and Tinian on April 14, against the backdrop of a global fuel crisis.
According to the Joint Information Center's latest update, 98 percent of the primary power lines on Saipan have been energized as of May 18.
"Although current generation capacity has been restored to 34 megawatts, surpassing pre-Super Typhoon Sinlaku operational levels, full power restoration has not yet been achieved," the information center said.
While generation at the power plants is now substantially stabilized, officials said ongoing restoration work remains necessary on damaged power poles, transmission infrastructure and lateral lines throughout the villages.
"Full restoration can only be realized once both generation capacity and distribution infrastructure repairs are completed, as these systems work hand in hand to reliably deliver power to all affected communities," the information center said.
On Tinian, 111 poles and 55 transformers are confirmed down and all feeders remain offline, affecting 1,059 customers.
Water service reached 24‑hour availability only the day before the meeting.
Line, water, and wastewater crews continue working from 6 a.m. to 9 p.m., but materials remain in short supply and shipments are arriving slowly.
The Guam Power Authority has deployed crews to Saipan to assist the CNMI with power restoration efforts.
The first shipment of power transmission and distribution materials from GPA arrived at CUC’s warehouse on May 20, with additional materials expected in the coming weeks.
At the May 21 board meeting, Terlaje said CUC needs immediate authority to borrow money to stabilize its operations.
“What are the recommended actions? For CUC, we need to finalize our emergency financing strategy. We need legislative authorization to borrow funds,” she said.
The proposed borrowing would allow CUC to purchase fuel, sustain operations, continue typhoon recovery, maintain vendor payments and bridge the gap until FEMA reimbursements and future revenues arrive.
Terlaje said the global fuel market has pushed CUC into a dangerous position.
“Our fuel costs are high due to the global crisis. It is beyond CUC’s control. Without fuel, there will be no generation,” she said, adding that the reliability of power production “depends on continuous fuel purchasing capability.”
She warned that the consequences of running out of fuel would be immediate and severe.
“Without generation, water and sewer services will become a crisis. Critical public safety systems will be compromised. Critical facilities won’t be able to operate. Communication systems will be disrupted. Health care and hospital services will be severely compromised," she said.
"Government facilities, the airport and seaport and schools will be forced to self‑generate until their fuel supply runs out. Economic activity will cease. Public health and safety will be threatened," she added.
Terlaje said utility sales and collections have dropped sharply because large portions of Saipan remain unenergized and Tinian is still offline.
Many customers are financially strained, further reducing revenue inflows. The fuel adjustment charge remains significantly underbilled, widening the gap between fuel costs and collections.
The Federal Emergency Management Agency has not committed to upfront procurement costs, and reimbursements for CUC‑incurred expenses typically take months.
Terlaje said the CUC has already reduced restoration crews and hours, paused hiring, delayed discretionary spending and prioritized only critical expenditures. She emphasized that internal cuts alone cannot solve the liquidity crisis.
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