Senate revives 80-MW plant

Citing “irregularities” in its decision to scrap the 80-megawatt power project, the Senate yesterday passed legislation to force the Commonwealth Utilities Corporation to stick with the original proposal despite its plan to have a smaller-sized plant.

The measure, if it becomes law, will declare as public policy the need for a project with such magnitude and effectively nullify the decision by the board last month to cancel the initial request for proposal (RFP).

Under Senate Bill 12-19 offered by Senate Floor Leader Pete P. Reyes, the CUC board will be absolved from potential liability arising from such decision, while doing away with its plan to conduct a fresh round of bidding, this time for a 60-MW generation capacity.
“It is hereby declared to be public policy of the Commonwealth that construction of an 80-MW power plant under the build, operate, transfer concept, beginning with immediate installation of 60 MW of generating capacity, is in the best interest of the Commonwealth and the people,” the bill stated.

The legislation was approved by eight senators present during their first regular session held on Tinian yesterday, which coincided with the swearing in of Sen. Jose M. Dela Cruz who was elected last Jan. 22 to replace former Sen. Herman M. Manglona. Senate Vice President Thomas P. Villagomez is off-island.

Mr. Reyes’ proposal is similar to the initial bill passed by the Senate last December prior to its adjournment sine die , but met lukewarm response from the House of the Representatives. It is now up for voting again under the new leadership in the lower chamber.

Among the changes in the provisions include requirement for low speed generators to run the proposed plant as well as options for firms to either maintain the price each has offered or withdraw from the bidding. It will make selection of the contractor to be made with 60 days after it becomes a law.

No risks

Called the Energy Sufficiency Assurance Act of 2000, the bill is intended to legislate procurement of the power project that has drawn controversy for the last few months and has been a constant source of rift between members of the Legislature and the government-owned utility corporation.

It will also eliminate legal impediments to pave the way for immediate awarding of the $120 million contract to a top bidder under the terms of the RFP issued in 1997 as well as phasing in of the 60-MW capacity.

According to its findings, CUC did not follow the advice of its independent power consultants when the board summarily canceled the RFP as two conditions were not met to arrive at such decision.

Burns & McDonnell, the private engineering firm hired by CUC to review all the bids and assess the power situation on Saipan, imposed two conditions before scrapping the initial project — that no opportunity exists to modify the current proposals and that the utility corporation can finance the direct purchase of generation.

In addition, the consultants did not recommend cancellation of the initial proposal, but the board went ahead last Jan. 13 and junked the RFP despite appeals from lawmakers and other business leaders.

“These irregularities with regard to… the meeting of the CUC board clearly expose the actions taken there to legal attack,” said the bill.

Underscoring the importance of efficient power supply in the island’s economic development, legislators said re-bidding the project will lead to increased cost and further delay which can harm efforts by the government to spur business activities here.

“The Legislature rejects the notion that Saipan does not need a new 80-MW power plant. There can be no doubt about the long-run need for this capacity,” they explained. “The issue is not the size of the plant but of the proper time frame for adding the new generating capacity.”