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‘Power plant privatization effort was a mistake’
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Posted on Dec 15 2005
The government’s previous effort to hire another independent power producer was a mistake, especially in light of the recent successive fuel price hikes, Gov. Juan N. Babauta said.
According to Babauta, privatizing Saipan’s main power plant, as contained in a Request for Proposal issued earlier by the Commonwealth Utilities Corp., is not the solution to island’s power crisis, which is mainly caused by the worldwide increase in the cost of fuel.
One alternative, he said, was for the CNMI residents to conserve electricity.
“If the people of the Commonwealth cannot agree to pay more for electricity, then we must simply use less,” Babauta said. He cited his administration’s energy conservation program, which reportedly resulted in hundreds of thousands of dollars in savings for the government.
The other alternative to raising rates was to find alternative technologies and or fuels for generating electricity more cheaply, he said.
However, the governor added, “One certainty is that that request for bids for an outside investor to build an additional 30 megawatts of diesel powered power generation—committing us to buying oil for another 20 years—was a mistake.”
For this reason, he said, his administration did not follow through with the bids for another IPP. “We already have IPPs on Tinian and Saipan. They serve a purpose, but they are costly. That is not a model for the future,” he said.
The power plant privatization project would have involved the takeover of the eight-engine Power Plant I in Lower Base, its rehabilitation and upgrade to meet federal environmental standards, and installation of two new 15MW generators. The contract would allow the private company to operate the machines for 20 years.
