House clears way for revival of 80 MW power plant

The House of Representatives on Friday followed the lead taken by the upper chamber of the CNMI Legislature as it cleared the road for the revival of the controversial 80-megawatt power plant project.

Members of the lower house approved a Senate-sponsored legislation aimed at forcing the Commonwealth Utilities Corporation to adhere to the original proposal despite recommendation from a private firm suggesting that CUC build a smaller power plant.

Speaker Ben Fitial said the time and public money consumed for the proposed Saipan power plant had necessitated the Legislature’s intervention on the project, despite objection by some House members including Rep. Heinz Hofschneider.

“It is imperative for the Legislature to step into this issue since it has dragged on for three years. It is the responsibility of the Legislature to ensure CUC follows its fiduciary duties,” Mr. Fitial pointed out.

According to him, the utility corporation had committed mistake when it failed to consult experts on the capacity demand for power on Saipan before it issued the request for proposals.

Mr. Fitial said there is nothing in the Senate Bill 12-19 offered by Senate Floor Leader Pete P. Reyes goes against the recommendation made by private engineering firm Burns & McDonell.

He noted the need to resurrect the RFP for an 80-MW power plant to allow CUC to move on and retain previous bidders for the project, pointing out that only those who have participated should be allowed to bid again.

“To allow new RFP would further delay the project,” Mr. Fitial said.

Senate Bill 12-19 absolves the CUC board from potential liability arising from such decision, while doing away with its plan to conduct a fresh round of bidding 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 60MW of generating capacity, is in the best interest of the Commonwealth,” the bill stated.

Senate Bill 12-19, or the Energy Sufficiency Assurance Act of 2000, 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.

Officials earlier sounded the alarm over possible acute power shortage because construction of the 80-megawatt power plant has dragged on for at least three years.

Utility officials last year confirmed that the delay in the construction of a new power plant project could cause serious consequences on the island’s power supply needs, since current facilities do not have the generation capacity to handle additional, and even present loads.

CUC was rushing construction of the new power plant so that it may be completed in time to meet the island’s projected power supply needs.

The governor has said the construction of the power plant should have started during the latter part of 1998 so it will be in complete operation by the turn of the century or the CNMI faces a possible power crisis.

The 11th Legislature earlier sought the assistance of the federal justice department in the CNMI House public utilities committee’s review of proposals submitted for the 80 megawatt power plant project, following formal complaints filed by seven of the 13 companies that submitted proposals to undertake the project.