CHCC Utility Rate Change to Save Hospital Millions, Improve Services

October 28, 2024

The House of Representatives has unanimously approved an amended Senate Bill 23-37, which reclassifies the Commonwealth Healthcare Corp. (CHCC) to pay commercial utility rates instead of the higher government rates. Initially co-authored by Senators Jude U. Hofschneider, Donald Manglona, and Corina Magofna, the bill is now set to return to the Senate for further consideration. This significant legislative shift seeks to reduce operational costs for CHCC, allowing it to reallocate resources more efficiently and potentially improve healthcare services across its facilities, including the Tinian and Rota health centers.

According to the bill, once CHCC is designated as a commercial entity, it would benefit from an 8.8% reduction in electricity rates per kilowatt-hour, a 98.4% reduction in water charges, and a 95.6% reduction in wastewater rates. Currently, CHCC owes the Commonwealth Utilities Corp. (CUC) $60.5 million, making this reclassification financially significant. Notably, an amendment by Rep. Vincent S. Aldan removed the bill’s retroactive effect, ensuring that penalties and late fees would cease moving forward, rather than retrospectively. This approach provides a fresh start for CHCC without the burden of past financial penalties, focusing instead on future sustainability.

Significant Financial Relief

This reclassification is poised to deliver substantial financial relief for CHCC, enabling the healthcare provider to channel more funds toward patient care and services. CHCC’s Marketing & Community Relations Officer, Lee Tenorio, emphasized the potential for improved operational efficiency that comes with the reduced utility rates. Tenorio highlighted that CHCC is the only healthcare provider in the CNMI subjected to government utility rates, unlike other private medical providers who already enjoy commercial rates. With this change, CHCC will finally be on a level playing field, which proponents argue is both fair and necessary for the hospital’s sustainability.

Furthermore, the bill underscores the critical need to sustain CHCC’s operations, stating that a utility service disconnection would precipitate a widespread health crisis. Enabling CHCC to pay commercial rates aligns with equitable practices seen in other medical facilities, ensuring continued access to essential healthcare services. The significantly lower utility costs will also allow CHCC to potentially enhance and expand its services, benefiting the community at large. In a healthcare setting where every dollar counts, this legislative move could translate to more comprehensive and accessible healthcare for the population.

Ensuring Healthcare Sustainability

The House of Representatives has unanimously passed an amended Senate Bill 23-37, reclassifying the Commonwealth Healthcare Corp. (CHCC) to pay commercial utility rates instead of the higher government rates. Originally authored by Senators Jude U. Hofschneider, Donald Manglona, and Corina Magofna, the bill returns to the Senate for further consideration. This crucial legislative change aims to lower CHCC’s operational costs, enabling more efficient resource allocation and potentially improving healthcare services at its facilities, including Tinian and Rota health centers.

Under the new bill, CHCC would see an 8.8% reduction in electricity rates per kilowatt-hour, a 98.4% reduction in water charges, and a 95.6% reduction in wastewater rates. Currently, CHCC owes the Commonwealth Utilities Corp. (CUC) $60.5 million, making this reclassification financially significant. An amendment by Rep. Vincent S. Aldan removed the bill’s retroactive effect, ensuring penalties and late fees would stop moving forward rather than affecting past charges. This amendment offers CHCC a fresh start without past financial burdens, emphasizing future sustainability and improved healthcare services.

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