Revamp CUC – Guerrero • Utility official seeks administration’s help to pull out agency from ‘chronic problems’

Chronic problems are plaguing the Commonwealth Utilities Corporation, affecting water and power distribution and even customer services to the community, according to Board Chair Jesus T. Guerrero.

He called for support from lawmakers and administration officials to help the government-owned utility firm hurdle what he described as challenges facing the CUC board.

“Based on our own evaluations, it is clear that chronic problems exist throughout the utility: chronic water problems, chronic power outages, chronic collection problems and repetitive customer service complaints,” Mr. Guerrero told in a letter to the governor.

He said the corporation must implement “structural changes” in order to address these constant problems by identifying the causes and drawing up solutions “without fail.”

Although several power engines are currently being overhauled at considerable cost, Mr. Guerrero maintained that CUC’s base load remains insufficient to bring paying customers back on the grid.

“In an emergency and with the typhoon season approaching, we need to plan our power needs very carefully given our existing power deficiencies,” he said.

On the water situation, the chairman said that CUC needs to review the master plan and its financial status in a move to seek solutions to the perennial water shortages confronting several areas on Saipan.

Even in villages where water quality is usually good like San Vicente and Koblerville, utility officials have tested higher salinity content in recent months. This will require adjustment on CUC’s production levels that will affect supply in those areas, he said.

“Aside from water conservation, the whole issue of water production and distribution must be reevaluated in light of information that shows changes in long-term weather patterns may affect rainfall levels in ways that we cannot yet predict,” added Mr. Guerrero.

Board actions

The letter, sent to Gov. Pedro P. Tenorio last July 12, also discussed in brief steps taken by the board to hasten procurement of the new 80-megawatt power plant on Saipan as well as to hire lawyers and power consultants to deal with legal issues surrounding the much-delayed project.

On Monday, the board approved a budget of half-a-million dollars to retain the legal services of Hong Kong-based Fulbright & Jaworski as well as local law firm of Brien Sers Nicolas, Robert T. Torres and Antonio S. Cabrera in preparation for the forthcoming negotiations with Enron.

The Texas-based conglomerate has been granted a conditional award of the estimated $120 million power project, paving the way for CUC to negotiate terms and conditions of the contract that it hopes to sign before end of the year.

Mr. Guerrero noted in the letter that protests filed by other bidders against its choice of Enron will be referred to the new legal counsels for the corporation for review and action.

Expressing confidence in dealing with the host of problems confronting CUC, he appealed for “strong administrative and legislative support” to carry out much-needed improvements within the corporation, including efficient customer service and financial status reports.

“The board is moving forward as quickly as it can and we welcome any suggestions you may have to advance our progress in any regard,” Mr. Guerrero told the governor.

The letter, however, did not mention the $12 million outstanding obligation by the government to CUC, which represent unpaid utility bills for the past few months.

Utility officials have been trying to collect the debt in an effort to straighten its financial shape that has been impacted by the rising fuel prices and declining revenues.

Mr. Tenorio has made commitment to meet it financial obligation to the corporation, but so far has made measly payment of at least $250,000 each month — which is not even sufficient to cover monthly government billings that run up to over a million dollar.