Enron protests CUC decision • Power giant wants reimbursement or reinstatement of 80-MW project

One of the top bidders on the controversial Saipan power project has protested the decision by the Commonwealth Utilities Corporation to scrap the 80-megawatt plant and throw out its proposal despite receiving the highest scores in the evaluation conducted by independent experts.

Enron Mariana Power cited lack of good faith and alleged bias by the government-owned corporation against the company which it said resulted in CUC’s “arbitrary and capricious breach” of the terms in the request for proposal implying fair and equal treatment of each bidder.

As remedy, the Houston-based industrial giant is seeking reinstatement of the mothballed power plant and selection of Enron as the top bidder, or reimbursement of at least $750,000 incurred by the company in bidding for the much delayed project, according to its lawyer.

The formal protest was filed by its legal counsel, Bruce L. Mailman, last Jan. 27, days after the CUC board canceled the original RFP and nullified all proposals submitted by 13 firms, including Enron’s.

It also revived previous complaints lodged in 1998 in which Enron questioned CUC’s bias as indicated in its choice of Japan’s Marubeni Corp. and its U.S. partner Sithe Energies Inc. as contractor despite mounting opposition from other bidders.

“Enron protests CUC’s apparent attempt to award the contract to the Marubeni-Sithe…regardless of merit or lack thereof and, failing that, to seek every possible means to avoid awarding the contract to Enron,” said the protest letter.

Although it was made to comply on time with the requirement in filing protests, Enron stressed that it may include other grounds for the new complaint after completing its inquiry into the Jan. 13 decision by the board.

Beside the formal protest, Enron likewise demanded from CUC Executive Director Timothy P. Villagomez through the Open Government Act several documents pertaining to the report drafted by independent evaluator Burns & McDonnell which was the basis for the cancellation of the initial project.

The request also included such correspondence, communications, memoranda and other reports as well as travel authorizations and contracts done between CUC and the consultants in connection with the preparation of such report.

“Enron has no choice but to bring its protest now, before it has access to the information necessary to fully investigate all of the bases of its protest. Enron therefore specifically reserves any and all rights it may have to supplement this protest when that information becomes available,” wrote Mr. Mailman.

Enron, the Tomen Consortium and HEI/SPP edged out Marubeni-Sithe in the nine-month review undertaken by Burns & McDonnell, but CUC had to forego selecting the final contractor pending assessment of Saipan’s power demand.

In the decision that angered some members of the Legislature, CUC junked the 80-MW plant in favor of a lower capacity power generation, citing continuous economic hardships confronting the island that have pulled down demand for electricity here.

Utility officials also pointed to the corporation’s shaky financial condition which would make it a big risk to invest on a project that would cost $120 million over 25 years.

They are expected to issue an invitation to bid this month for a 60-MW plant, while the Legislature is attempting to investigate bribery allegations against Mr. Villagomez as well as to forbid re-bidding of the project.