CUC mum on talks about downsizing 80-MW plant

Utility officials were mum yesterday on speculation the Commonwealth Utilities Corporation has proposed downsizing the original plan on the 80-megawatt Saipan power plant amid delay on a final decision to award the $120 million project to a potential contractor.

CUC legal counsel Bill Ohle said the board will respond to statements made by Senate Floor Leader Pete P. Reyes urging the government-owned utility company to speed up procurement of the plant as well as to claims of a change in the plan.

The board has scheduled its first meeting in two months next week where the power project is one of the topics in the agenda, according to Ohle.

He confirmed, however, that proposals offered by various power companies were required to “stay valid” within a specific time period based on the independent review of Burns & McDonnell, the private engineering firm hired by CUC.

Reyes claimed in his letter to CUC Chair Rosario M. Elameto that bids will become void unless a decision is reached by the board before Oct. 16 this year.

“I can’t comment on the letter, but I understand that she will be responding to the senator,” Ohle said in a telephone interview.

Rosario did not return call when contacted for comment on Reyes’ allegations contained in a letter dated Sept. 29.

Alarmed by the delay, the senator has called on CUC to begin its selection and announce its choice as soon as possible in order to expedite construction of the long-stalled new power plant.

The Kansas City-based engineering firm has completed the second phase of its review which, according to earlier CUC statements, will be the basis of the board’s decision to award the contract — touted to be the largest deal ever on the island.

Only six out of nine companies deemed qualified to bid on the power plant handed in their “best and final offers” for the second phase of independent evaluation.

These are Enron Mariana Power, LLC; Marubeni-Sithe; Ogden Energy, Inc./PMIC; Saipan Power Partners and HEI Power Corporation; and the consortium of Alsons, Tomen, Singapore Power and Tan Holdings Corp.

The utility corporation is under pressure from the government to expedite resolution of the dispute lodged by Enron against CUC’s choice to award the contract to Marubeni-Sithe, which has delayed construction for more than a year.

Meanwhile, Enron vice president David Howe has asked CUC anew to “proceed with all deliberate speed to an award” of the project contract.

“(F)urther foot dragging on awarding the contract may shortly cost the CNMI and your fellow citizens millions of dollars, since prices ‘locked in’ by the best and final offers expire very soon,” he said in a Oct. 1 letter to Elameto.

The Texas-based industrial giant also believes that the 80-MW capacity of the plant is the “correct size,” given the current needs and anticipated demand on Saipan, according to Howe.

He added that the new power plant will be needed by 2005 based on the findings by experts, while it is expected to be on-line by 2003 if construction begins as soon as possible.