Previous Story
New repayment scheme for CUC debt
|
Posted on Nov 24 2006
The House of Representatives yesterday passed the latest version of a bill amending the law that requires Saipan’s future independent power producer to pay half the debt owed by the Commonwealth Utilities Corp. to the Commonwealth Development Authority.
The lawmakers in a special session yesterday adopted the conference committee’s recommendation to mandate the IPP to rebate back the $22.75 million to residential power customers, rather than require a repayment of the debt.
The rebate could be in the form of a fixed dollar amount discount or credit on a consumer account. The refund would be reviewed and approved by the Public Utilities Commission during the privatization process.
Authored by Senate President Joseph Mendiola, Senate Bill 15-62 originally sought to remove a provision that requires any company taking over the power plant to pay half of CUC’s $45.5-million written-off debt to CDA.
The House amended the bill; it retained the payment requirement and proposed that the money be used for several government programs and projects. The Senate rejected the House amendment and a conference committee made up of Senate and House members was formed.
The committee maintained that the repayment may discourage companies from bidding on the planned privatization of CUC’s power division. In addition, the debt service requirement would be added to the cost of producing power and may be passed to consumers, thereby increasing the electric rates for consumers.
“[Thus]…it is not in the best interest of CUC or the people of the Commonwealth to require an independent power producer to pay fifty percent of the $45,500,000 to the [CDA] or for other government projects. The repercussion of the debt service repayment greatly outweighs any benefit of the repayment,” the committee said.
