Enron to CUC: Go easy on downsizing power project

The top bidder in the controversial Saipan power project has cautioned the Commonwealth Utilities Corporation against downscaling the initial plan to ensure efficient electricity.

Enron said a potential power crisis still remains and that the proposed 80-megawatt plant can help meet increasing demand in the future in line with CNMI’s plan to develop its economy.

“The urgency that CUC previously stated is in fact still a reality. And if the size of the plant is in question, it should be how much larger it should be, not smaller,” said David B. Howe, Enron vice president, in a letter to Board Chair Rosario M. Elameto.

He also assured CUC that it would generate more revenues if the original plan is followed as it would serve more customers than the existing power capacity.

Citing Enron’s proposed fuel costs, Howe claimed the utility firm could realize savings between $6 to $8 million each year, based on current CUC power production.

But these assumptions, according to the Enron official, depend on the number of customers hooking up with island power, which is projected to grow along with the plan to spur the local economy through the free trade zone proposals.

The government-owned utility corporation is weighing a proposal to scale back the project to 45 MW, noting the economic difficulties facing the island do not warrant such a huge project.

On Monday, the board agreed to hire Burns & McDonnell anew to undertake an assessment and feasibility study on Saipan’s power demand to support the downsizing plan.

A report will come out mid-December before the expiration of the 90-day extension period granted earlier to review findings by the independent experts on “best and final offers.”

Based on Burns & McDonnell’s analysis, Enron, the Tomen Consortium and SPP/HEI outranked Marubeni-Sithe — CUC’s earlier choice as contractor of the $120 million project during last year’s highly-disputed procurement proceedings.

Both Enron and the Tomen consortium have expressed concern over the decision to carry out another study, a move they said could push back the project again.

Designed to meet power demand by the end of this decade, the project has stalled for more than a year stemming largely from questions on CUC’s procurement regulations.