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Sunday, April 20, 2014

Dela Cruz to call for rejection of CUC emergency extension

Gov. Benigno R. Fitial extended anew last week his executive order declaring a state of emergency for the Commonwealth Utilities Corp., but Rep. Frank Dela Cruz (IR-Saipan) said yesterday he will move to reject the EO as soon as a House session is called.

“The governor should have a very good and compelling reason for his action on extended CUC EO. I hope he is not trying to purchase another power plant behind closed door,” Dela Cruz told Saipan Tribune.

Some pro-impeachment lawmakers have concerns that Gov. Benigno R. Fitial might try to sign sole-source contracts weeks before the incoming House majority plans to re-introduce a resolution impeaching him for allegations of corruption, neglect of duty, and felony.

Dela Cruz, for example, was particularly concerned that the governor would once again sign a major sole-source deal, like what he and former attorney general Edward T. Buckingham did with a 25-year, $190.8-million diesel power purchase agreement. This PPA is now the subject of a lawsuit.

Fitial, in his Nov. 19 executive order, extended for another 30 days the CUC emergency declaration.

This means the governor has direct control over CUC because there has not been a functioning board of directors. The extended EO also allows the governor to reprogram funds to meet the CUC emergency.

Fitial’s EO also means continued suspension of CUC’s procurement laws or rules to address the CUC emergency for at least another 30 days. Fitial has been extending his CUC EO since the initial one—signed on May 18—expired in June.

The governor also continues to suspend the authority of the Public Utilities Commission.

The governor-aligned House leadership, however, has not challenged any of the governor’s EOs, including those on the Commonwealth Health Center and the NMI Retirement Fund.

Fitial once again said there remains a “financial” and “technical worker” crises at CUC.

He said CUC is owed over $9 million by the Public School System and CHC, and is owed millions more by residential customers.

“CUC is facing $2.6 million in accounts payable to vendors who have, in good faith, provided materials and services... There is conflict and potential conflict between CUC and government agencies over money owed and other issues. Such conflict drains resources especially if it results in the parties going to court,” he said.

The governor also said CUC often only has days’ worth of diesel fuel to power its system because it lacks the funds to buy oil from its sole, cash-only supplier. Fitial said CUC has no credit or other means to buy fuel other than the revenue it collects from its customers.

“A unified government approach is necessary to reconcile and resolve the fiscal crises of the government with the fiscal crises of CUC. This can only be achieved through an emergency declaration,” Fitial said.

As for technical worker crisis at CUC, Fitial said the extended EO continues to suspend Public Law 16-17 so that CUC can continue to hire non-U.S. citizens to fill technical and professional staff positions.

There are not enough U.S. citizens or U.S. resident technical specialists at CUC to perform power generation work, particularly on the type of engines that CUC uses.

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