CUC gets additional $500K from govt

The Commonwealth Utilities Corp. yesterday received another $500,000 from the CNMI government, making the total government subsidy for the utility firm’s fuel costs $1 million this week.

However, the total amount of $2 million pledged by the Babauta administration on Wednesday to the CUC—besides the $500,000 the government gave to the beleaguered utility last Tuesday—appeared uncertain.

CUC’s acting executive director, Sohale Samari, said yesterday that the government pledged to give the CUC another $500,000 possibly on Tuesday next week, besides the same amount given yesterday—a total of $1 million. The government has made no clear-cut guarantee regarding the additional $1 million it pledged to give the CUC the following week.

“The other $1 million the following week has to do with the fuel tanker. Basically, the government has told us that it will deal with issue of the fuel tanker when the fuel tanker arrives,” Samari said.

“Right now, all we’re going to get from the government is the $500,000 that we got today [yesterday] and the $500,000 that we’re going to get next week,” he added.

Samari said Mobil’s fuel tanker is scheduled to arrive Saipan from Singapore on Jan. 4, two days earlier than expected.

With the cost of fuel consumption hovering around $179,000 daily, however, the $1 million government subsidy already received by the CUC this week appears insufficient to last fuel stock for the CUC’s power plants after about six days.

On Saipan, Samari said Power Plant 1 and 4 consumes an average of 70,000 gallons and 14,000 gallons of fuel, respectively, at a cost of $1.75 per gallon. The daily consumption results in a daily fuel cost of $147,000.

Samari said Tinian’s daily fuel consumption averages 12,000 gallons, while that on Rota reaches 4,000 gallons. At the rate of $2 per gallon, the CUC’s daily fuel cost for the two islands’ power plants reaches $32,000.

Samari added, though, that the CUC’s monthly collections have been hovering around $6 million since the implementation of the fuel surcharge. Samari said no power load shedding related to fuel supply and the CUC’s cash flow could be seen in the coming days.

“The load shedding that happened was fuel load shedding,” Samari clarified, contrasting the situation to a possible scenario of a power plant breakdown. “All of a sudden, [if] one of the engines breaks down, we have to resort to load shedding.”

The CUC said it ended power load shedding on Saipan beginning 4:30pm last Wednesday. Saipan’s villages experienced power outages last Tuesday, when the CUC began load shedding to prolong its fuel stock that was already running out.

The CUC said on Tuesday that it could not pay for the scheduled fuel deliveries on that day, less than a week after the lifting of Gov. Juan N. Babauta’s emergency declaration that put the CUC under his direct control. The emergency declaration allowed the governor to reprogram government monies to solve the power crisis.

Samari said then that the CUC needs some $2 million of subsidy from the CNMI government this week—plus $1 million each for the two succeeding weeks—to ensure sufficient fuel stock that would support power generation until Jan. 9, 2006.

The administration’s $1-million fuel subsidy this week and its pledges averted the anticipated worsening of Saipan’s power situation. Before Samari met with administration officials Wednesday afternoon and obtained another $500,000 from the government yesterday, he said the CUC would resort to “extensive” load shedding even after Christmas Day.