Governor asked anew on CUC emergency control

The House of Representatives has adopted another resolution asking Gov. Juan N. Babauta to submit detailed plans on the state of emergency at the Commonwealth Utilities Corp. and on power privatization.

In House Resolution 14-146, which was transmitted to the Senate on Sept. 27, 2005, House members said “the CNMI Legislature remains ill-informed and left in the dark” over CUC’s privatization plans, “notwithstanding the fact that the Legislature has a fiduciary duty to the people…to keep the public informed of such issues…that may dramatically change the lives of people for the worse.”

The resolution, introduced by Vice Speaker Tim P. Villagomez and co-sponsored by other members, said privatizing Power Plant I “is a monumental undertaking and the ramifications of which may be catastrophic and disastrous to the people of the Commonwealth.”

It cited that a June 1997 feasibility study by CH2MHILL, in association with Winzler & Kelly Consulting Engineers, Southern Energy Inc., and MacMeekin & Woodworth “enumerated numerous legal and political barriers to contract operation or privatization of CUC.

These include tax issues, civil service rights, impact on CUC employees, employment of nonresident workers, utility rates, real property ownership and use, tax exempt bonds, repayment of federal grants, equity conversion, funding conditions, Environmental Protection Agency construction grants, and the like.

The CUC has pending proposals from private companies—Telesource and Rolls Royce—to privatize the operations of Power Plant I. Up to now, no decision has been made yet whether privatization will continue or not.

The same resolution cited that the governor has yet to submit to the Legislature a detailed report on his current state of emergency on utilities, which began on May 19 this year.

The lower chamber said that the governor is required, pursuant to 1 CMC section 7403(a) “to indicate in his financial plan any function, program, or project which will have to be curtailed or deferred during the emergency due to the emergency itself or due to fiscal constraints, any additional revenues which may be needed to ensure sufficient funds, and any additional information, which the governor deems appropriate.”

Early last month, the House also adopted House Joint Resolution 14-42 demanding that the governor submit to the Legislature “a complete financial analysis” of his alleged illegal diversion of funds in relation to his emergency control of CUC.

At the same time, the joint resolution demanded that the Office of the Public Auditor and the Attorney General’s Office “investigate the illegal use of public funds by the governor.”

“The people of the Commonwealth, through the Legislature, hereby demands the Governor to submit to the presiding officers of the Legislature a complete financial analysis showing the sources and the amounts that were illegally diverted by the governor to pay for the CUC’s debt and operational cost,” read a portion of the joint resolution.

It cited that under 1 CMC subsection 7402 and 1 CMC subsections 7302 and 7403, “no funds may be reprogrammed, and no obligation or contract for the expenditure of Commonwealth funds shall be made for any purposes other than the public purposes for which the funds are appropriated.”

It said that the law also provides that “no Covenant funds may be reprogrammed or otherwise transferred or borrowed from capital improvement and economic development accounts to government operational accounts.”

It further said that the governor is only allowed by law to reprogram up to 25 percent of funds appropriated by the annual appropriation for the operations of the government.

Any reprogramming that exceeds the 25 percent limit shall be subject to prior approval by the Legislature, the House said.

The governor earlier disclosed that since his May 19 emergency declaration, he had reprogrammed $5.1 million from local funds and $2.6 million from capital improvement projects for CUC.

He also said that the Marianas Public Lands Authority has agreed to reprogram $1 million for CUC. MPLA is also believed to provide CUC $300,000 in “advance payment.”

The CIP reprogramming was reportedly used with the consent of the federal government for power plant repair and improvement in Lower Base.

Shortly after the May 19 emergency declaration, the Legislature then adopted HJR 14-36 supporting the governor’s disaster emergency declaration and “authorizing the governor 100 percent reprogramming authority from available Commonwealth funds to remedy the power generation problems.”