CUC to present privatization plan

Amid severe financial problems affecting its power plan operations, the Commonwealth Utilities Corp. is poised to present its power privatization plan before the members of the Legislature tomorrow.

Acting House Speaker Timothy P. Villagomez said yesterday that CUC’s privatization consultant, Dennis Swann, vice president of Harris Group Inc., will present the firm’s findings on the plan.

“CUC said they are coming to the chamber. They’ve confirmed their attendance for Friday,” said Villagomez, who is also chair of the House Committee on Public Utilities, Transportation, and Communications.

In a letter to Villagomez on May 10, CUC executive director Lorraine A. Babauta said CUC officials hope to meet with the PUTC committee members from both the House and the Senate. The Senate panel is headed by Sen. Diego M. Songao.

“Our consultant will be making a presentation on the evaluation of the IPP proposals received [for the privatization of power plants I and II],” she said.

The CUC has received six bidders for the project.

Earlier, one of the six bidders called on CUC to scrap the Request for Proposal and start the process all over again, alleging that the agency allowed another bidder to submit a proposal that did not meet the criteria.

In a Jan. 21 letter to CUC, Saipan Power Partners executive managing director Kent A. Larsen said that only two firms actually submitted proposals that conform to the RFP criteria. He said a third bidder, Rolls Royce Power Ventures did propose.

“We strongly believe that CUC is not conducting an RFP process according to the practices governing privatization, nor is CUC applying the standards set by the U.S. government with regard to privatization of government assets,” he said.

CUC board chair Frank Guerrero earlier confirmed that three companies submitted proposals for the privatization project, but only two have been considered responsive to the RFP. Rolls Royce’s proposal did not qualify because the company was interested only in building the facility, Guerrero said.

He said that CUC was not inclined to initiate a new bidding process due to its current financial crisis. He said CUC cannot afford to pay Harris Group another $103,000 for its consultancy services.

CUC wants to enter into an agreement with an independent power producer to modernize, upgrade, operate, and transfer its two Lower Base power plants.

Under its privatization plan, CUC wants to enter into a build-operate-transfer arrangement with the winning bidder.