Elameto slams attempts to meddle in CUC’s decision

Commonwealth Utilities Corporation Board Chairperson Rosario Elameto has opposed the approval of two proposed measures in the Legislature that seeks to revive the mothballed 80-megawatt power project in Saipan because these would interfere on the firm’s financial decisions.

In criticizing Senate Bill 12-19 and House Bill 12-048, Ms. Elameto said the proposed measures were not carefully drafted to address a broad policy issue but simply meant to override a decision of the board.

Saying the board has worked for a long time and has expended public funds to get expert’s advice and assistance on the project, Ms. Elameto said the bills contain “vindictive inaccuracies.”

The Senate has already passed SB 12-19 which will force CUC to stick with the original proposal to build an 80-megawatt power plant on Saipan despite the utility firm’s decision to reduce the project to 60 megawatts.

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 the Legislature and the government-owned utility corporation.

Ms. Elameto slammed the criteria stated in the Senate version which says that an award can only be made to a proposer seeking the installation of low speed engines, on grounds that it eliminates competitive bidding.

“Such an approach to the procurement of the CNMI’s most expensive project ever would assure a huge over expenditure of funds,” she said in a letter to Rep. Rosiky F. Camacho, chair of the House Public Utilities, Transportation and Communications Committee. This would result in a need for financial assistance from the government or an increase in power rate or both.

On the other hand, House Bill 12-048 is ambiguous as to what procedure must be followed by CUC in “negotiating” a contract that invites further conflict and litigation in the selection process.

In consultation with their experts, Ms. Elameto said CUC has determined that the governing criteria for award, after technical pre-qualification, should be priced alone.

The two proposed measures were silent on the subjective evaluation of experience, one criteria which has been the subject of bickerings and protests between the contracts since the project was first solicited.

“CUC’s decision, as recommended by our experts, to resolicit pre-qualified price bids eliminates the problems created by the subjection evaluation criteria of the prior RFP and guarantees that the Commonwealth will receive the lowest price. It would be a grave error to override this decision and to force CUC into what is
ostensibly sole-source price negotiation for a project of this size,” Ms. Elameto said.

The right to operate and control its own finances without interference was guaranteed to CUC by the Office of the Governor in the Partnership Agreement entered into with the U.S. Office of Insular Affairs in 1995. The CUC board chief emphasized that any violation of that agreement can result in the suspension of the CNMI’s funding of the Capital Improvement projects.

Amid all these attempts to interfere with the CUC board’s decision, Ms. Elameto said the board members will still push through with the plan to build an affordable plant and utilize a sealed bidding procedure which will ensure that CUC and its customers will get the best price possible in procuring a new power plant.

CUC had canceled last month the original request for proposal on the 80-MW plant, citing shaky financial condition and the continuous economic difficulties confronting the CNMI that have pulled down power demand here.

Instead, a fresh bidding will be conducted soon for a smaller-size plant with capacity of 60-MW based on the recommendation by Burns & McDonnell.

The utilities corporation is expected to award a multi-million dollar contract for the Saipan power project this May amid attempts by the Legislature to investigate its decision to scrap the initial plan after nearly three years of soliciting and evaluating proposals.

Several lawmakers have opposed such a move, noting that re-bidding the project would further delay the procurement of the project and put in peril the island’s economy.

Designed originally to meet anticipated surge in power demand by 2000, the power plant was to be constructed through build-operate-transfer scheme under a 25-year lease to be repaid through revenues collected by CUC.