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CUC told to explore alternatives to surcharge
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Posted on Jan 07 2005
Gov. Juan N. Babauta yesterday urged the Commonwealth Utilities Corp. to explore other means of reducing power generation costs, instead of implementing a fuel surcharge.
In an interview, Babauta particularly mentioned a proposal by the Saipan Chamber of Commerce for CUC to consider using a cheaper type of fuel for its power plants.
He said that based on his discussions with Chamber president Alex Sablan, he found the business group’s suggestion “sound” and worth considering.
“One of the things that drive the price of fuel is the type of oil that is used. Right now, the fuel that we use is very costly. If we change the fuel that we use, it would drive the cost of power generation down and it may not be necessary to raise the rates,” Babauta said. “I appreciate that [the Chamber members] are also concerned about CUC’s problems and they are offering ideas and alternatives, and CUC should take a look at that.”
He added that CUC should pursue the power plant privatization project, along with changing the fuel type being used.
“It would be the way to go. The impact of the cost of delivering electricity would not be a burden on the consumers,” Babauta said.
Sablan’s proposal is for CUC to convert its power plant back to utilizing the No. 2 bunker oil, rather than using the more expensive low sulfur automotive diesel oil the plant currently burns.
In an earlier interview, Sablan said the use of bunker oil would require CUC to increase its maintenance schedule and therefore, more frequent power outages. But he expressed confidence that these disadvantages far outweigh the amount of money CUC currently spends for diesel oil.
“We’re already doing load shedding today. I think the people of the Commonwealth, if posed the question, would prefer to share in the burden of power outages rather than take a 35-percent increase in their bills. It’s a matter of money out of the pocket versus time without power,” Sablan said.
He noted that all CUC would need to do was to give residents and businesses enough time to plan for power outages.
