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CUC eyes new fuel supplier
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Posted on Dec 14 2004
The Commonwealth Utilities Corp. is giving itself over four months to find a new fuel supplier in an effort to ensure a competitive selection process.
CUC’s current two-year contract with Mobil Oil Mariana Islands Inc. will remain effective until April 30, 2005. But CUC board of directors as early as yesterday instructed the management to put out a request for proposals for interested fuel suppliers.
In a unanimous decision, the board directed the management to publish the RFP by Dec. 21 and to finalize a scope of work two weeks thereafter.
“Four months can go so fast. We decided to do the RFP ahead of time, hopefully to get some competitive bids from fuel suppliers around the world,” said board member Joe Torres.
CUC chair Francisco Q. Guerrero said CUC is also trying to give interested contractors ample time to study the utility firm’s existing facilities, as well as the investment that they would need to make.
Guerrero said the next supplier will likely be awarded a 5-year contract with CUC, giving them enough time to recoup their outlay.
The RFP, he added, will be sent to the American Public Power Association and the Pacific Power Association to reach more fuel companies.
Torres also said the RFP will be for the supply of diesel, which is the fuel currently used at CUC power plants.
The Saipan Chamber of Commerce is urging CUC to convert its power plant to burning the cheaper black fuel, rather than diesel, to cut the firm’s operation expenses, especially in view of the rising cost of fuel.
“The goal of the RFP is just to address the present situation [which is the approaching expiration of CUC’s contract with Mobil]. We are sticking with diesel until such time that the utility is ready for overhauling the power plant system,” Torres said.
Production fuel is one of CUC’s biggest expenditures. Due to the consecutive price hikes, CUC spent a total of $39.7 million for fuel in fiscal year 2004—an increase of $12.1 million from FY 2002 and a $6.4 million from FY 2003.
