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Potential IPP may still pay $22.5M CUC debt
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Posted on Nov 18 2006
A winning independent power producer may still be asked to pay half the $45 million that the Commonwealth Utilities Corp. owes the Commonwealth Development Authority but, instead of remitting it to CDA, the money would stay with CUC.
House Speaker Oscar M. Babauta said this is the latest consensus that is likely to be adopted by the Legislature when passing an amendment bill to the CDA-CUC writeoff law.
“Instead of giving it to CDA or capital improvement projects, the IPP would have to pay $22.5 million to CUC to [subsidize] the utility consumers’ fees for 18 months,” said Babauta in an interview yesterday.
He said this would benefit residential consumers as it may result in reduced utility rates for 18 months.
Babauta said the amendment was reached among conference committee members headed by Sen. Frica Pangelinan and Rep. Frank Dela Cruz.
“It’s agreeable to both houses. I’m pretty sure it will go through,” said the speaker.
About two weeks ago, the consensus among committee members was to spare the winning bidder for the power plant privatization from having to pay the debt.
The House had opposed this, with Reps. Ray Yumul of Saipan and Crispin Ogo of Rota pushing for the use of the payment to finance infrastructure projects.
A conference committee has since been convened and is now ready to report its findings, said Babauta.
The pending bill, Senate Bill 15-62, seeks to amend the recently enacted CDA writeoff as embodied in Public Law 15-12.
The bill, authored by Senate President Joseph Mendiola, seeks to amend Section 2 of the law “to further the rehabilitation and reorganization of the Commonwealth Utilities Corp.”
This provision refers to the requirement that the contractor pay 50 percent of the $45-million CUC debt to CDA.
The amendment bill, along with the law creating Public Utilities Commission, are prerequisites to the CUC privatization program.
