Saipan Tribune

Tuesday, May 21, 2013

Saturday, October 13, 2012

BECAUSE PPA NEEDED MORE ANALYSIS

Fletcher says he refused to sign PPA

Gov. Benigno R. Fitial, as well as former attorney general Edward T. Buckingham, asked Commonwealth Utilities Corp. acting executive director Alan Fletcher on Aug. 2 to sign the $190.8-million power purchase agreement but Fletcher told the Special Committee on Impeachment yesterday that he “respectfully declined” to do so because he felt the agreement needed more analysis.

Fletcher repeatedly told the impeachment panel yesterday that CUC had been consistent in its statement in July that the proposed PPA needed more analysis.

A day after that Aug. 2 meeting between Fitial, Buckingham, and Fletcher, the governor and the former AG signed the sole-source, 25-year PPA with Saipan Development LLC. Buckingham left the CNMI a day later, despite a penal summons for him to appear in court two days later.

Yesterday marked the ninth day of the impeachment hearings in the House of Representatives chamber, in connection with a resolution impeaching the governor for 16 allegations of felony, corruption, and neglect of duty.

Among those issues were the governor's signing of a no-bid, $190.8-million power purchase agreement that was the topic of yesterday's hearings.

Fletcher told the impeachment committee, in responding to Vice Speaker Felicidad Ogumoro's (Cov-Saipan) series of questions, that he thought it was a “policy decision” for the governor to make on the PPA.

Ogumoro directed the committee and Fletcher's attention to a “draft” memo that Fletcher prepared but never signed.

The vice speaker repeatedly asked Fletcher, “Why didn't you tell the governor to not sign the agreement?”

Fletcher again said it was a policy decision, and that CUC had been repeatedly telling the negotiating team and the governor that the proposed agreement needed more study.

“I don't tell the governor what to do. He tells me what to do. And at that second meeting, we made the advice that the agreement was not ready to sign and needed more analysis, the same consistent statement we have made over the last 30 days. At that same meeting, the former attorney general said this agreement is ready to move forward or something to this effect, we negotiated as far as we can. This agreement was going to move forward with or without my input or my recommendation,” Fletcher told the committee.

Still, Ogumoro was not satisfied with Fletcher's response.

“It is your responsibility as the head of CUC to stand up and tell the governor what needs to be told if you feel that way. In this letter, you did not say that to the governor. That advice was not there, I'm sorry to say it,” Ogumoro said.

Ogumoro, the governor's ally, raised her voice several times when questioning Fletcher, other committee members later said.

Fletcher, however, calmly responded to every question asked him throughout the hearing, with CUC legal counsels Deborah Fisher and Rebecca Wrightson by his side.

Impeachment Committee chair Rep. Joe Deleon Guerrero (R-Saipan), in a later interview, said he thought the vice speaker was trying to blame Fletcher for the signing of the PPA.

The PPA is now under a temporary restraining order, and lawmakers have asked the administration to conduct a full economic analysis, something that has yet to be done two months after the agreement became public.

Higher rates

At the beginning of yesterday afternoon's hearing, Deleon Guerrero asked Fletcher about his understanding on the impact of a 50MW diesel power plant on CUC and the rates paid by its customers.

“How can CUC pay for energy for 50MW even if it consumes only 30MW? If you're only asking customers to pay for 30MW?” he asked.

Fletcher reminded the committee that CUC's only source of revenue is the payment of customers.

“Any requirement in a power purchase agreement will be funded by the consumers; in other words, what those costs were whether it was a take and pay clause, I think you're referring to, would have to be reflected in the rates,” he said.

Deleon Guerrero said Fletcher was “basically stating that rates would have to be adjusted to accommodate that. In other words, rates may have to be raised.”

“Rate revenue is CUC's only source of revenue,” Fletcher added.

In responding to questions from Rep. Stanley Torres (Ind-Saipan), Fletcher said CUC was directly involved in the talks with Saipan Development LLC only up until July 10. After that, he said CUC was no longer directly involved in the negotiations. He, however, said CUC continued to provide technical and other assistance to the negotiating team, or the Office of the Attorney General.

Last week, Fitial issued a statement saying that Fletcher lied to the Impeachment Committee in his testimony on Wednesday last week wherein Fletcher said he does not believe the current PPA is in the consumers' best interest.

Despite this, Fletcher said he continues to support the governor's “efforts to act in the best interest” of the CNMI people and said his “entire testimony” to the impeachment panel was “truthful.”

The hearings will wrap up on Monday, with Department of Public Safety deputy commissioner Ambrosio Ogumoro as the only witness scheduled to testify that day. Last week, he invoked his Fifth Amendment right to remain silent when asked to testify before the committee.