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CUC warns of cash shortfall; defends fuel-adjustment charge petition to CPUC
Summary
During a Senate briefing, CUC said it has asked CPUC for a fuel-adjustment charge change and has submitted a $75 million FEMA advance-reimbursement request; CFO Betty Turley said CUC expects liquidity pressure (possible shortfall by mid-June) and is negotiating loans and vendor terms.
The Commonwealth Utilities Corporation (CUC) told the Senate on May 20 that it has petitioned the Commonwealth Public Utilities Commission (CPUC) to adjust the fuel-adjustment charge (FAC) and that its restoration spending has strained the utility's short-term finances.
CFO Betty Turley said CUC filed its petition to CPUC on March 31 and that CPUC did not act immediately because it lacked a quorum. Turley said CPUC did take action in mid-May; she emphasized that the FAC methodology used by CUC has not changed and rejected accusations that CUC used the FAC to "price gouge." "CUC's methodology on the FAC has never changed," Turley said. "So there's no increase to make a profit on the cost that we need to recover to purchase fuel."
Turley told senators CUC has submitted projects to FEMA seeking an advanced reimbursement of $75,000,000 to cover restoration costs and fuel purchases. She said the utility is negotiating extended payment terms with vendors and pursuing limited borrowing: a judge recently approved an $8,000,000 loan from a PFAS settlement trust, but that funding is restricted to water and wastewater generator fuel and cannot be used for general power-plant fuel needs.
Senators asked how long CUC can operate if FAC reconciliation is delayed; CUC said restoration costs have already drawn down reserves and indicated it may face a cash shortfall by mid-June unless reimbursements or a line of credit materialize. CUC said it prefers a line of credit to avoid drawing the full loan amount upfront, and that the utility is working with the legislature to authorize borrowing if needed.
The Senate also discussed practical effects: CUC reported outstanding pre-storm obligations and vendor charges (including roughly $4 million in pre-storm payables) and said vendors, heavy-equipment rentals and fuel purchases for field crews are principal current cash drains.
CUC said it is continuing to pursue all available federal support and is coordinating daily with federal partners. The Senate requested further documentation on the FEMA submission and asked CUC to provide written details about outstanding obligations and its plan for short-term liquidity at the next briefing.
