Aggreko contract won’t be renewed

Contrary to earlier projections, Aggreko International’s $6 million contract with the Commonwealth Utilities Corp. will not be renewed when it expires on Sept. 11 as CUC now expects it will be able to generate as much as 54 megawatts of electricity and be able to have reserve power for the first time.

These are based on a power plant rehabilitation timeline released by CUC yesterday.

Gov. Benigno R. Fitial and CUC executive director Tony Muña said yesterday that CUC’s power plant rehabilitation has been progressing “very well.”

“In fact, by September, when Aggreko power expires, we will have more than enough capacity to replace Aggreko power, plus provide reserve [power] for the first time. We didn’t have reserve power before,” Fitial said at yesterday’s press conference on Capital Hill.

Muña said that by March 30, the number of engines that will be operating will double, from two to four. Currently, only engines 6 and 8 are operational. By the end of the month, CUC will be able to bring engines 7 and 3 online for a total capacity of 15 megawatts.

On power plant 1 alone, CUC expects to increase the capacity from 8 MW to 23 MW, while the overall capacity for CUC assets without Aggreko will be about 41 MW, according to Muña.

Approximately 41 MW are needed to provide 24-hour power on Saipan.

CUC hired the U.K.-based Aggreko International last year to provide 15 MW of temporary power to Saipan, which at the time was suffering from constant blackouts due to the poor condition of CUC’s power plant.

Under the $6 million contract, CUC must make a monthly payment of $504,000 to Aggreko.

By June 30th, CUC expects to bring another engine online—engine 1—bringing the total capacity of CUC assets, without Aggreko, to 48 MW.

“By Sept 30th, the power plant 1 production capacity will increase to 34 MW, and the overall capacity for CUC assets, again without Aggreko, will be 54 MW,” Muña said.

He added, “From a production standpoint, we are really moving very well and by the end of the year, we’ll be in a very good shape.”

Fitial said by September, six engines would be fully overhauled, plus engine 2 whose crankshaft is now undergoing repair here. Engine 2 will be able to produce an additional 5 MW.

“We were able to repair the crankshaft here. These are very expensive ones—$1.5M apiece—on island. We have already prepared one crankshaft for engine 3; we will be able to repair the crankshaft for engine 2 very soon,” the governor added.

Prior to the governor’s press conference, Muña was in the chamber of the House of Representatives to update lawmakers on the current status of the power plant 1 rehabilitation.

Muña also cited the hiring of CUC deputy director Wallon Young, who worked on CUC’s power plant rehabilitation timeline.

“With respect to advising Aggreko on June 13 as to whether we will need to continue their services beyond Sept. 11, we’re confident that we can advise them we will not have to,” he said.

In a few weeks, CUC will make a formal recommendation to the governor that it will be able to de-link from Aggreko by Sept. 11.