‘Extend Aggreko deal anew for $1.6M’

Commonwealth Utilities Corp. power plant manager Richard Cano holds presentation about the need to extend CUC’s power supply agreement with Aggreko for 18 weeks, at yesterday’s CUC special board meeting at the CUC conference room at the Joeten Dandan Building. (FERDIE DE LA TORRE)

The Commonwealth Utilities Corp. management wants to again extend its temporary power supply agreement with Aggreko for 18 weeks at a cost of $1.6 million.

In a presentation at yesterday’s CUC board meeting at the CUC conference room at Joeten Dandan Building, CUC power plant manager Richard Cano also talked about the need for an additional $1.2 million for the overhaul of the power plant’s Engine 7.

Cano held the presentation to justify the CUC management’s request for the board to release a total of $2.8 million from CUC’s restricted funds to “assist this critical situation.”

When Saipan Tribune left the meeting at noon, board chair Miranda V. Manglona and directors Matthew Holley, Jovita Paulino, and Janice Tenorio were in an executive session to discuss the release of restricted funds and other issues.

The original contract with Aggreko was to provide temporary power for 90 day to while CUC’s generator engines are being overhauled and repaired. That contract was first extended in January 2020 for another 90 days, and then twice extended again. Early this year, CUC extended its power supply deal with Aggreko to mid-2021. At his presentation yesterday, Cano said Aggreko’s fourth contract extension will end on July 26, 2021. Because of the delay in the overhaul of Engine 7, that overhaul might now end in mid-September 2021, Cano said.

“So we requested that there will be an extension for Aggreko because our [power] reserve without Aggreko will be very minimal,” he said.

In fact, Cano said, the contract with Aggreko should be extended up to end of November 2021, or about 18 weeks from the expiration of the contract in July.

He said the extension is needed because, while the engine overhaul is expected to be completed in mid-September, the foundation will also have to be repaired for about two months.

Cano said there is an ongoing negotiation for the replacement of Engine 5 and that they are expecting that it will be finalized by July 2021. “It’s about six months to finalize everything and another six months for the delivery to the plant. So a total of about 12 months,” he said.

At the end of July 2021, with the addition of eight megawatts, their reserve capacity will be 28 megawatts, Cano said. Aggreko produces 12MW.

On average, Saipan needs 33MW of power supply. The peak load is 37MW. Presently, the plant is restricted to 36MW, with 8MW of reserve and this includes 12MW of power provided by Aggreko.

Cano said the overhaul of Engine 1 will start by middle of October and end in February next year.

Cano said there are two months for the retrofit and four months for the overhaul. He said retrofit means they are going to install a new turbocharger to increase the efficiency of the generator.

For Engine 3, they will also do the retrofit in February to April next year, followed by retrofit of Engine 2, Cano said.

CUC acting executive director Betty Terlaje said that all these projects will require about $5.7 million.

“$7.3 million has already been paid, it’s already funded, and has been paid partially to Aggreko,” Terlaje said.

She said they need an additional $1.6 million for the extension of the Aggreko contract because of the overhaul.

Terlaje said they need an additional $1.2 million for the overhaul of diesel Engine 7.

In an interview during a break, CUC chair Miranda V. Manglona said they don’t have any figure yet on the release of restricted funds, as they’re going to have an executive session.

“So once we go out we relay the amount of how much we have on hand and how much we release for engine replacement and power plant 1,” Manglona said.

This story has been updated to correct the lede and photo caption: It should be 18 weeks, not 18 months.