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Yumul: CUC loan with MPLT ‘problematic’
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Posted on Jun 29 2008
A lawmaker has raised concern about the Commonwealth utility’s proposal to get money from the Marianas Public Land Trust for its temporary power contract.
Rep. Ray N. Yumul said the Commonwealth Utilities Corp. could run into legal problems by borrowing money for operational expenses.
“CUC does not have the legal authority to seek a loan from anybody,” said Yumul.
He added that a 2006 executive order signed by Gov. Benigno R. Fitial requires CUC to get the consent of the Legislature before making any loans worth over $500,000. CUC has not sought legislative approval for its proposal.
CUC has asked $4 million from MPLT, which invests money collected by the Department of Public Lands from the use of government property.
Yumul, who was present at the MPLT meeting on Friday, quoted CUC executive director Antonio Muna as saying that the $4 million would be used not only for CUC’s contract with Aggreko International, but also for fuel expenses and the utility’s debts to its power plant contractors, Telesource CNMI and Pacific Marine and Industrial Corp.
“We know CUC is desperate for money, but we have to make sure they get it the right way,” said Yumul.
CUC recently signed a contract for Aggreko International to provide rental generators for the Saipan power plant, which is undergoing major repair. The contract requires CUC to make a partial payment of $1.5 million before Aggreko will ship the generators.
The $6-million contract is for one year and includes the generators, lube oil, personnel costs, and maintenance. The monthly rate is pegged at $504,000, for a total of $6 million a year. CUC will provide diesel to the company.
The generators will provide additional 15 megawatt to Saipan’s power supply.
