Saipan Tribune

Friday, May 24, 2013

Thursday, October 11, 2012

'Diesel power for 18 cents per kWh is not possible'

Commonwealth Utilities Corp. deputy director for power system Wallon Young told the Special Committee on Impeachment yesterday that there's “no way” and “not possible” to produce diesel power for 18 cents per kilowatt-hour even with the best diesel engine available-the rate that the Fitial administration claims to be among the reasons for pursuing a no-bid $190.8-million power purchase agreement with Saipan Development LLC.

Young, who oversees the operations of CUC's power plants, was among the witnesses as the impeachment hearing in the House of Representatives entered its seventh day.

The hearings are in connection with a resolution impeaching Gov. Benigno R. Fitial for 16 allegations of felony, corruption, and neglect of duty, including those in connection with the 25-year PPA.

Impeachment Committee chair Rep. Joe Deleon Guerrero (R-Saipan) said that Young's testimony was informative and shed more light on the sole-source power purchase agreement.

He said coming from a power engineer himself, the 18 cents being proposed is “impossible,” and “that there's no engine on this planet that can generate electricity for 18 cents per kWh.

Deleon Guerrero also said it appears that the CNMI may be buying the full 50MW diesel power plant whether it needs to or not, thereby affecting the rates.

In his testimony, Young said that based on the information available so far about the PPA, it could still cost some 30 cents to produce a kilowatt hour of power using diesel engine.

This is not far from the 36 to 37 cents per kWh being charged CUC customers, Young and some lawmakers said.

Press secretary Angel Demapan, when asked for comment, said, “The administration would like to know the basis for Mr. Young's conclusion.”

“First they said a full analysis is needed to determine such. Now they're drawing their own conclusions. Which is it? The governor has consistently stated that CUC is a major roadblock to bringing costs of utilities and alternative energy to the CNMI because they have a special interest to keep rates high to support their own inflated payroll,” Demapan told Saipan Tribune.

In responding to a question from Rep. Tony Sablan (R-Saipan), Young said the PPA would raise costs because 50MW would be required to be produced even though the needed power is much less than that.

He said there is over 70MW available power on Saipan, including those on standby. Young said the peak load is some 30MW, but the average load is less than that.

In his testimony, Young said a revised study CUC made in 2011 showed that the existing power plant 1 has a lifespan of 10 years or more.

Appearing with Young was CUC legal counsel Deborah Fisher.

The $190.8-million PPA is also the subject of an ongoing court case filed by Reps. Janet Maratita (Ind-Saipan), Rep. Ray Yumul (R-Saipan), and the CNMI Senate.

Other witnesses called in yesterday were Finance Secretary Larrisa Larson and acting NMI Retirement Fund administrator Lillian Pangelinan, to testify on other articles of impeachment connected to Fitial's alleged failure to remit full employer contributions to the Fund since 2006, thereby threatening the pension agency's solvency.