CUC expecting the $2M subsidy today

After a meeting with administration officials, Commonwealth Utilities Corp. acting executive director Tony Guerrero expressed optimism that the government would give the utility firm today the needed $2 million so it could buy some 1.1 million gallons of fuel, which would support power generation for the next two to three weeks.

Mobil’s scheduled fuel delivery tomorrow will temporarily stop the uncertainty about CUC’s ability to provide uninterrupted power on the islands—at least for a few weeks.

Since the week before Christmas until this week, CUC had to scramble for government subsidy as the three installments of $500,000 given by the government in the past two weeks could only purchase fuel that would sustain power generation for a few days. The subsidies, however, averted rolling blackouts that had been initially implemented on Dec. 20 and 21.

Guerrero said he expects the government to provide CUC the money to pay for the fuel delivery this afternoon. Guerrero said CUC needs to pay Mobil $2 million to ensure the fuel delivery, as Mobil’s fuel tanker will arrive on Saipan from Singapore tomorrow.

Guerrero said he and CUC board chair Frank Guerrero met yesterday with Gov. Juan N. Babauta, Lt. Gov. Diego T. Benavente and Finance Secretary Fermin Atalig about the needed money to ensure the tanker’s delivery of fuel.

“They are committed to assisting the CUC tomorrow [today] in the amount of $2 million,” the executive director said after the meeting yesterday.

The approximately 1.1 million gallons of fuel to be delivered by Mobil could sustain CUC’s power generation for the islands for 18 to 20 days, Guerrero said.

Although he earlier said that fuel supply at Saipan’s power plants would last until yesterday only, Guerrero added that the fuel stock could last until CUC receives the fuel delivery tomorrow.

“At the moment, we are [running] short [of fuel]. We really need the fuel delivery,” Guerrero said.

The CUC has been suffering from a cash flow problem, despite its average monthly collection of $6 million. The monthly collections include fuel surcharge on top of the cost of customers’ power consumption.

CUC’s power generation for Saipan, Tinian and Rota costs approximately $179,000 daily. On Saipan, CUC’s two operational power plants consume an average of 84,000 gallons at a cost of $1.75 per gallon, resulting in a daily consumption of $147,000.

Tinian’s daily fuel consumption averages 12,000 gallons, while that on Rota reaches 4,000 gallons. At the rate of $2 per gallon, CUC’s daily fuel consumption for the two islands’ power plants costs $32,000.

The transition committee for CUC has yet to come up with recommendations to the incoming administration of Gov.-elect Benigno Fitial on how to solve the power crisis.