Power plant runs out of fuel—again

Lights went out again in various Saipan villages after the Puerto Rico power plant ran out of fuel for the second time in less than two weeks.

Pamela Mathis, the Commonwealth Utilities Corp.’s special adviser for corporate communications, said the fuel ran out due to the failure of Mobil Oil Marianas, to deliver oil that the utility firm paid for on Monday.

The power outage hit Middle Road areas at 9:40am. About two hours later, CUC had to turn the Garapan area offline, as increased power demand put additional pressure on the Lower Base power plant.

CUC continued the load shedding in the afternoon, putting Middle Road and Garapan back online while cutting electricity to the Capitol Hill, Kagman, Tanapag, San Roque, and Marpi areas.

According to Mathis, CUC paid $71,216 to Mobil on Monday for 40,000 gallons of fuel. However, Mobil did not make the scheduled delivery amid concerns over CUC’s $8-million debt to the oil firm.

As a result, CUC was forced to purchase 20,000 gallons of fuel from Shell Marianas for $37,500. Shell delivered the fuel supply, which should be sufficient to keep the Puerto Rico power plant running through Tuesday night.

At around 3:30pm, Mobil delivered 13,000 gallons. CUC has yet to resolve with Mobil the issue regarding the balance of undelivered fuel, Mathis said.

Mobil said in a statement that CUC’s inability to meet its financial obligations prompted it to temporarily stop fuel delivery to Saipan’s sole power provider, but added that it resumed fuel delivery yesterday afternoon.

Mobil said that yesterday’s fuel delivery to the CUC was an emergency procurement by the utility firm following the power outage.

The outage occurred even as potential investors are meeting on island in a Department of the Interior-sponsored “business opportunities mission.”

“CUC has recently defaulted on payment to Mobil for its past due obligations on its previous contract. This has resulted in additional credit controls being placed on CUC’s fuel account,” said Cecile Bamba Suda, Mobil’s public relations and government affairs manager.

“It is unfortunate that an outage occurred this [yesterday] afternoon. Mobil is trying its best to meet CUC’s current fuel needs, despite the ongoing fuel payment issues,” Suda said. “Had a supply contract been in place, the ordering and delivery process would be less cumbersome.”

Suda did not disclose the amount owed by the CUC.

A similar incident took place on May 9, with the Puerto Rico power plant running out of fuel due to Mobil’s failure to deliver fuel on time despite receiving payment from CUC.

Mathis explained that a miscommunication between Mobil Oil Marianas and the independent power producer operating the Puerto Rico plant had caused the delay.

Mobil, however, had blamed the delay on the refusal by CUC plant personnel to accept the product on the evening of May 7.

CUC’s fuel problem stems mainly from its current lack of a formal fuel supply contract. CUC’s two-year contract with Mobil expired on April 30.

As a result, CUC has to purchase fuel based on need and makes payments by shipment.

The CUC board is expected to make a final decision on the firm’s request for proposals for fuel supply. Mobil is the only company that has submitted a proposal.

CUC recently begun implementing a fuel surcharge on customers’ power bills to defray the rising cost of fuel. (With John Ravelo)