Political meddling in CUC could harm other CIP projects

Commonwealth Utilities Corp. Executive Director Timothy P. Villagomez yesterday warned that political interference in the management of the community utility could result in the withholding of all Capital Improvement Projects in CNMI by the Department of the Interior.

The embattled executive director’s statement came amid a twin move by the Senate and the House of Representatives to restore the mothballed 80 MW power project, which CUC downgraded to 60 MW.

The down-sizing of the plan has drawn criticisms from bidders and legislators, citing waste of taxpayers’ money used to fund study and hiring of independent consultants.

The right to operate and control its own finances without interference was guaranteed to CUC by the Office of the Governor in Partnership Agreement entered into with the DOI’s Office of Insular Affairs in 1995.

While CUC appreciates the intent of the Legislature to protect the corporation and the community, Mr. Villagomez said the approval of Senate Bill 12-19 will set a precedent in managing an autonomous agency.

“I certainly do not want this to happen. I know my fellow Cabinet members are relying on CIP funds for roads, schools water projects, wastewater projects and more,” he said.

If signed into law, CUC will be forced to stick with the original proposal to build an 80-megawatt power plant on Saipan despite the utility firm’s decision to reduce the project.

Mr. Villagomez emphasized that the board members of the utilities corporation has every right to cancel any RFP. It scrapped the original RFP following legal advice to do so.

“The vendors file protests, and there is certainly fear of lawsuits — all of which delay a project that the entire community wants and needs,” he said. Customers can save a lot of money, perhaps even lower the rates, if a smaller power plant will be built, he added.

Unfortunately, the original RFP was not written to allow the board to alter or change the size or phases of construction and the proposals were based on the price of an 80 MW power plant not for a smaller one.

CUC had canceled the original RFP on the 80-MW plant, citing shaky financial condition and the continuous economic difficulties confronting the CNMI that have pulled down power demand here.

A new bidding will be conducted for a 60 MW based on the recommendation of Burns & McDonnell, an independent company hired to study the proposals of the various companies.

Gov. Pedro P. Tenorio is requesting CUC to submit its comments on the Senate bill following the Legislature’s override of three measures vetoed by the chief executive.

The utilities corporation is set to award a multi-million dollar contract for the Saipan power project this May amid attempts by the Legislature to investigate its decision to scrap the initial plan after nearly three years of soliciting and evaluating proposals.