Senate to reject CUC emergency

Senate President Paul Manglona (Ind-Rota) said yesterday that the Senate leadership is poised to reject Gov. Benigno R. Fitial’s executive order declaring a state of emergency for the Commonwealth Utilities Corp., saying the reasons cited by the governor in his EO could have been addressed without taking over CUC once more.

This is the first time a legislative leader spoke out on the issue. Both the Senate and House have been uncharacteristically mum after Fitial placed under a state of emergency not only CUC but also the NMI Retirement Fund and the Commonwealth Healthcare Corp. within weeks of each other.

At the same time, the Senate is concerned that CUC’s decision to back out of a $10-million loan agreement with Rhode Island-based Independence Bank after getting local and federal agencies involved and without promptly notifying the bank could discourage legitimate investors from dealing with the CNMI.

Fitial cited cash, procurement, and hiring crises for placing CUC under emergency—reasons that have already been addressed or could have been addressed without an EO, said Manglona.

“I respectfully ask all the members to reject the executive order for CUC,” Manglona said in an interview with reporters.

Manglona said the governor could have signed the Marianas Public Land Trust’s $7 million line of credit bill for the Commonwealth Healthcare Corp. to help CHC pay CUC, to cover portions of the central government’s $8 million debt to CUC for unpaid utility billings.

Fitial signed the line of credit bill after already placing CUC under emergency.

The governor’s CUC EO also came just a few days after U.S. Interior Assistant Secretary for Insular Affairs Anthony M. Babauta approved on May 14 the redirection of $3.5 million in capital improvement project money from the Puerto Rico Dump closure project to CUC so that CUC could comply with federal consent decree requirements.

In his EO, Fitial said the lack of a functional Public Utilities Commission is stalling renewable energy projects that need PUC procurement review. It must be noted, though, that the Senate has already confirmed Fitial’s three appointees to the PUC even without a public hearing on one of them and the lack of required documents from all three.

There has never been a full PUC board since its inception. Fitial waited until after the term of the last remaining commissioner expired to nominate three new commissioners.

“PUC was created by law for a reason. I am concerned that even with a functional PUC, the governor will try to circumvent the law and decide on all contracts by himself or his administration,” Manglona added.

Fitial said that CUC cannot procure projects from off-island bidders because the Board of Professional Licensing does not have the quorum required to issue licenses or certificates of authorization, which are prerequisites to bidding on CUC projects.

BPL has only one member now; the law requires at least three to have a quorum. Fitial has nominated people to BPL but with little success after the nominees backed out or declined the offer. The Senate is just awaiting the governor’s nominations to BPL.

The governor also cited the need to continue hiring non-U.S. technical staff at CUC but Public Law 17-1 limits CUC’s ability to do so. It was also Fitial who signed that bill into law.

Manglona acknowledges that both the Senate and House should reject the governor’s EO for it to become effective. “All it takes is one house to keep quiet and this EO will still remain in place,” Manglona said.

Press secretary Angel Demapan, when asked for comment, said the Fitial administration is hopeful that the House will not reject the CUC EO.

“The governor believes that the House members equally share the administration’s desire to bring about affordable utilities for everyone. The EO will remain in effect until such time that the goal of shifting dependence from conventional to alternative energy is achieved,” Demapan told Saipan Tribune.

Rep. Edmund Villagomez (Cov-Saipan), chair of the House Committee on Commerce and Tourism, said that based on what he has read and heard, the governor does not seem to have a standing in declaring CUC under a state of emergency.

“CUC has been addressing its deficiencies and we never heard of CUC asking for it to be placed under emergency prior to the governor signing the EO. But this is something that we should carefully look into,” Villagomez said.

Rep. Frank Dela Cruz (R-Saipan), who earlier said that the central government—and not CUC, CHC, and the Fund—should be placed under a state of emergency, said he had the same sentiments as the Senate—“that CUC issues could be addressed without the governor’s intervention but now that the executive director [Abe Malae] is no longer present, then this changes how CUC is to move forward.”

Fitial met with Malae before actually issuing the CUC EO dated May 18. The EO, however, already appointed an acting executive director even before Fitial and Malae met, and even before Malae could turn in his resignation.

“If Malae was still on board, I would vote to reject [the EO] but at this time I do not trust the acting director and comptroller to move CUC forward. Aside from this, these gentlemen are not quite versed in the new alternative energy as presented by Global Energy Corp. The governor has been made aware of this new technology and ongoing talks are being made,” Dela Cruz told Saipan Tribune.

Dela Cruz, chairman of the Saipan and Northern Islands Legislative Delegation’s Public Utilities, Transportation and Communications Committee, said, “Unfortunately, present management, except for Wallon Young, are not aware of these developments.

“Again, I would like to know the Senate’s reasoning to reject [the EO]. I hope that this is not a political game being played,” he added.