Over $62K paid to CUC consultants

The Commonwealth Utilities Corp. has obligated a total of $62,148 to two consultants working on at least 11 items needed to meet some of the requirements of a consent decree that compels CUC to adhere to U.S. Environmental Protection Agency regulations, CUC officials told the Public Utilities and Infrastructure Committee yesterday.

CUC executive director Tony Muña and power generation managing engineer Venugopal Prabhakara, in their update on compliance with stipulated order No. 2, also disclosed that some drums containing used oil and are stored at Power Plant 3 at Isley Field have tested positive for polychlorinated biphenyls, PCBs.

“Disposal of used oil, primarily those with PCBs, outside of the CNMI is one of the plans,” Prabhakara said.

PCBs are synthetic chemicals whose manufacture was stopped in the U.S. in 1977 because of evidence they build up in the environment and can cause harmful health effects.

Rep. Tina Sablan, chair of the PUIC, raised concern about CUC’s lack of a budget breakdown for all costs associated with the requirement of the consent decree, among other things.

“To this date, CUC also still doesn’t have a financial plan, a separate accounting for each of the divisions—water, power, wastewater. They still don’t have a chief financial officer. It’s not clear to me whether CUC is close to compliance, given a 180-day deadline from March 11,” she said.

Sablan said CUC is also required to have a fulltime project coordinator for the stipulated order No. 2, but Prabhakara not only oversees SO2, but also has full responsibility over CUC’s power plant.

The U.S. Department of Justice and EPA filed a civil suit against CUC for failure to comply with the Safe Water Act and Clean Water Act for years. The suit was accompanied by two stipulated orders, which means that the CNMI government agreed to the terms and conditions being required of it by the EPA.

In March, U.S. District Court for the NMI Chief Judge Alex R. Munson signed an order that sets requirements and deadlines for CUC to meet.

In their presentation yesterday, Muna and Prabhakara cited four factors blocking CUC’s compliance with stipulated order No. 2, including insufficient funding due to recovering of less than 100 percent of operating costs, lack of skilled staff, lack of training and skill sets, and deficiency in the implementation of a Spill Prevention and Control Countermeasure plan.

Stipulated order 2 covers power plants 1 and 2, including the Mobil-CUC fuel transfer pipeline and Tank 104 area, as well as Power Plant 1 at Isley Field, Power Plant 4 at PMIC, and the Rota power plant.

Gov. Benigno R. Fitial’s Executive Order 2008-17 identified CUC’s used oil as a threat to the environment and public health.

Sablan said CUC currently has some 400,000 gallons of used oil, about 300,000 of which are stored in Tank 104. Muña and Prabhakara said Tank 104, as well as tanks 101 to 103, has doubtful or untested integrity.

Muña said CUC reprogrammed within its budget $150,000 for immediate deliverables and consultancy work for stipulated order 2.

To date, the obligated expenses include a $47,003 payment for consultant Knight Enterprises Inc., and $15,145 for EA Science & Technology.

CUC was able to beat the May 9 deadline for submitting a Health and Safety Plan. Its two consultants have six other deliverables by June 9, including power plants 1, 2 and 3 work plans, assessment of CUC pipeline corrosion control and report, a CUC pipeline integrity testing work plan, a comprehensive schedule of work, and a tank system integrity testing.

The other deliverables will be performed by CUC, with deadlines from June 9 to Sept. 8.

Muña said CUC’s challenges include manpower shortage. Sixteen additional staffers, for example, are needed at Power Plant 1 for proper plant operation and maintenance. He said CUC lost a lot of time due to the massive efforts required in stabilizing Saipan’s power supply.

CUC’s 19-page April 9 status report on stipulated order 1 also shows that a lot of the items have not been completed.

Muña also briefed PUIC members about the preferred stock memorandum of agreement recently signed between CUC and the Commonwealth Development Authority.