CUC may alter 80-MW project

The Commonwealth Utilities Corporation hinted at changing the original plan on the Saipan power project, further fueling speculation that it has decided to downsize the 80-megawatt plant in light of the present situation on the island.

CUC Chair Rosario M. Elameto assured, however, the utility board will determine its outcome on Wednesday when independent experts present their final report to the public after nine months of reviewing proposals handed in by 13 power firms.

“It is the duty of the CUC Board, many members of which are recent appointees, to carefully consider all the benefits and risks of this project, and to listen to our independent experts,” she said in a letter to Senate Floor Leader Pete P. Reyes.

Elameto was responding to the senator’s letter urging the board to speed up resolution of the dispute surrounding the stalled project as he warned the government-owned utility firm that submitted bids would stay valid only until Oct. 16.

Reyes also noted talks of impending modification to the initial project by lowering its generation capacity — speculation met with silence by utility officials.

According to Elameto, the board is committed to providing reliable power service and to increasing CUC’s generation capacity, but that it cannot ignore financial obligations associated with such project.

“CUC has failed to see the load growth as projected when this project was first proposed,” she explained, “yet it has seen a fifty percent increase in fuel prices over the past year, the government default of over $9 million in utility bills, and continued pressure to federalize immigration and curtail the garment industry.”

To be constructed through the build-operate-transfer scheme at an estimated cost of $120 million, the Saipan power plant was designed years ago to meet the demand for reliable power on the island by the end of this decade.

Re-examine: But the economic crisis dogging the CNMI for nearly two years has prompted calls to re-examine the project, noting both commercial and residential may not require such a huge generation capacity to supply them electricity.

At present, CUC has a peak capacity of 65 MW but large consumers, like hotels and garment factories, are usually told to switch to their own generators when existing plants malfunction or when consumption jumps, especially during the summer months.

Although she did not directly comment on the rumored downsizing plan, Elameto stressed CUC has worked “extremely hard” over the last year to comply with requirements of the project — a process that has delayed its construction for over a year.

The new Saipan power plant has been mired in legal squabble since September 1998 when CUC announced its intention to award the contract — touted to be the largest deal ever in history of the island — to Japan’s Marubeni Corp. and its U.S. partner, Sithe Energies, Inc.

Last January, the utility corporation hired Burns & McDonnell to conduct independent re-evaluation of all proposals after the Office of Public Auditor recommended such action.

The Kansas City-based engineering firm came up with its initial report last March in which it whittled selection to nine companies, six of whom handed in their “best and final offers” for the second phase of review.

Its findings, completed last month, will only be divulge to the public for the first time during the board meeting Wednesday.

Gov. Pedro P. Tenorio last week said he won’t step in to resolve the issue on the delay, but cautioned the board that it has to consider actual demand and consumption if it decides to alter the plan.