State of emergency declared

Due to recurring power outages, Gov. Juan N. Babauta declared a state of disaster emergency yesterday and subsequently assumed control of the Commonwealth Utilities Corp., initially for 30 days or up to 90 days—if necessary.

In his State of the Commonwealth Address held at the Multi-Purpose Center yesterday morning, Babauta said the CUC crisis—which he blamed largely on the lack of a long-term fuel contract—“is an emergency that threatens the welfare of everyone in the Commonwealth.”

CUC’s top officials met Babauta’s declaration with acquiescence and expressions of hope that the governor’s move would help get CUC out of its crisis.

As early as 2:30pm yesterday, Lt. Gov. Diego T. Benavente and governor’s consultant Adam Turner were already at the CUC office in Dandan, reportedly to begin negotiations with fuel supplier Mobil Oil Marianas Inc. The board also cancelled a scheduled special meeting yesterday afternoon.

In his declaration, Babauta cited “an extreme, immediate, and imminent emergency” arising from the CUC’s failure to pay Mobil Oil Marianas for fuel and the “almost zero” power reserves in the Commonwealth.

“I find that this declaration is necessary to ensure the continued provision of power to critical CNMI public health and public safety facilities, the continued provision of electricity to our schools, homes, and workplaces, and the continued operation of our water and wastewater systems,” said Babauta.

Invoking his constitutional authority, he said that during this period of emergency, he will take “all necessary measures” to assume full control of the CUC and suspend all regulatory statute provisions and regulations applicable to CUC, including procurement regulations.

The governor’s emergency powers suspends the CUC board of directors’ power, authority and or responsibility. The governor would also have the authority to reprogram all funds to address CUC’s problems.

“This declaration also allows me to use any funds available from any source to ensure that the power does not go down. Whatever the cost, I will ensure the safety of the people of the Commonwealth,” said the governor.

In a later interview, the governor said he has formed a team to negotiate with fuel supplier Mobil “for a long-term contract that provides stability and control on fuel price and ensure that supplies will be delivered uninterrupted to the power plant.”

CUC chair Francisco Q. Guerrero and CUC executive director Lorraine Babauta said in separate interviews that they welcome the governor’s assumption of full control of the utility firm.

Guerrero expressed belief that the central government could do better at resolving CUC’s fuel crisis because it has more funds at its disposal.

“The governor has the authority to tap more money, unlike us, who cannot just go out and borrow money to purchase fuel. We cannot resolve this fuel crisis unless we do something drastic like increasing rates. But then, we can’t do even that because we just implemented the fuel surcharge,” said Guerrero.

Lorraine Babauta, who said she had heard about the planned declaration before the State of the Commonwealth address, welcomed the state of emergency for the same reason.

“The cost of fuel has taken its toll on CUC. Under the state of emergency, CUC will be able to get the governor to step in and assist in any way possible to make sure that a fuel contract is executed at the earliest possible time. That’s basically what’s been keeping us from moving forward,” Babauta said.

She added that CUC will continue to work with the Governor’s Office in negotiating with Mobil.

Saipan Chamber of Commerce president Alex Sablan said he hopes the governor would take advantage of the state of emergency to make necessary changes at the power plants.

Specifically, Sablan urged the governor to convert the power plants to using bunker oil, as opposed to the more expensive diesel that CUC is currently utilizing for power generation.

Last Tuesday, a major power outage occurred—the second time in less than two weeks—because the Puerto Rico power plant ran out of fuel. CUC said it was due to Mobil’s failure to deliver fuel that the utility firm had already paid for on Monday.

Mobil said that CUC’s inability to meet its financial obligations prompted it to temporarily stop fuel delivery to Saipan’s sole power provider. On Tuesday afternoon, though, Mobil resumed delivery to CUC following “an emergency procurement.” A similar incident took place on May 9.

In a separate interview, press secretary Pete A. Callaghan said yesterday that the administration plans to take in former American Samoa Power Authority chief Abe Malae as it addresses the power problem.

Earlier reports said that the governor, through a federal grant, wanted to hire Malae as CUC executive director. Following criticisms, the CUC board said that Malae would just serve as consultant. Callaghan said no contract has been signed yet with Malae.

Vice Speaker and former CUC executive director Timothy P. Villagomez said the House of Representatives will look into the “nature” of the emergency declaration.

“The constitution calls for disaster, civil disobedience, calamity emergencies. Calamity goes for the unavailability of utilities or transportation, communications, so we have to look at that carefully,” he said.

What is interesting, said Villagomez, is that the CUC board would be nonfunctional during the emergency period. “What’s the board going to do? Their function is basically removed because the governor is stepping in,” he said.

The lawmaker said the governor’s declaration was not the first on utilities. During the term of Gov. Froilan C. Tenorio, he said a state of emergency was declared on water.

He also noted that even Washington Rep. Pete A. Tenorio has been calling for the declaration of state of emergency for water. (with Agnes Donato)