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Bill to remove $250M price tag on CUC introduced
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Posted on Oct 14 2008
Senate President Pete P. Reyes has penned legislation that would remove the $250-million price tag set by a just-passed law for the sale of the Commonwealth’s power system.
The bill says the widely criticized artificial price floor should be removed “for the protection of the people.”
“Any purchaser would, naturally, have to recoup this investment and would, necessarily, have to dramatically increase the rates charged to customers to recover the cost. The Legislature finds that maintaining this artificial floor will greatly harm ratepayers and the economy of the CNMI,” the bill states.
The bill has been pre-filed, and has not been introduced on the Senate floor. Sen. Paul A. Manglona, chairman of the Senate Committee on Public Utilities, Transportation and Communication, vows not to allow the bill to pass without allowing the public to comment. He says a public hearing will be held on the measure.
Antonio Muna, executive director of the Commonwealth Utilities Corp., is looking to talk with the Legislature about amending the new power privatization law, which was enacted over the governor’s objections.
Muna’s concerns include the $250-million price tag, as well as the methodology by which the legislation requires the privatization to be done. Under the bill, CUC must privatize its power system through a bidding process, as opposed to a “request for proposals”. Muna suggests that a straight bidding, where the focus is getting the lowest price, may not result in CUC getting the most qualified company to operate the power system.
Proponents of the measure maintain that the legislation is urgently needed to avert an emergency declaration by the governor that would result in another sole source privatization contract. They also tout the prohibition of “requests for proposals” in the procurement process as one of the law’s strengths. They note that a bidding process will prevent protests that hampered previous privatization efforts.
