Contract to run Tinian power plant up for bidding

The contract of independent power producer Telesource CNMI to run a 10-megawatt diesel power plant on Tinian is set to expire in March next year and that contract is not expected to be extended.

That means the Commonwealth Utilities Corp. will soon be advertising the bidding for the contract and that may start next month, according to CUC executive director Gary P. Camacho last Friday.

The contract started in September 1997, with Telesource CNMI contracted to build and operate the Tinian power plant for $21.6 million.

Camacho disclosed in an interview Friday that, according to the Office of the Attorney General, which reviewed the contract, there will be no extension.

“There is a contract that expires and, according to the Office of the Attorney General, we are required to advertise that and we will be doing so,” he said.

Telesource can participate in the bidding, he said, adding that the company has done a wonderful job over the years and their record shows that.

“They have been there through storms and so forth. However, the contract is the contract,” he said.

Camacho said he was not around at the signing of the contract many years ago, but the OAG’s interpretation of the contract is that it will expire in March 2020 and CUC is holding a bidding as part of the requirements.

As to the terms of the new contract and the question of how long the new contract will be, Camacho said they are still putting the scope together and that the CUC board will ultimately decide on that.

“The board will decide whether 10 or 20 years. I don’t want to speak for the board,” he said.

Under the initial deal, Telesource was to design and construct, procure all necessary equipment and materials; arrange all shipping to the site; and initially own and maintain and operate the power plant. After that, CUC would ultimately own and operate it.

CUC pays Telesource $2 million annually to provide power services to Tinian via a series of monthly payments of $180,000 represented by 120 promissory notes., On top of this, CUC was obligated to pay $50,000 monthly in quality and management fee and a production fee of 2 cents per kilowatt per hour.

In November 1998, the first change order was adopted, increasing the size of the power plant from 10MW to 20MW by the installation of two 5MW units and the addition of a 30MW substation.

In May 2001, a change order was adopted, extending the terms of the contract to 2020.

Tinian has about 4,000 residents.

Last August, CUC Tinian resident director Evelyn Manglona said Tinian now has zero power outages as the island has enough power supply, having 20MW in available capacity but only 2MW being used at its peak.

Manglona said everyone on Tinian got their power supply back last March and April after the island was devastated by Super Typhoon Yutu in October 2018.