Saipan Tribune

Sunday, May 26, 2013

Thursday, January 10, 2013

SDLLC told that PPA deal is void

Attorney General Joey P. San Nicolas has notified the Delaware-based Saipan Development LLC about Gov. Benigno R. Fitial's concurrence with his opinion that the $190.8-million power purchase agreement with SDLLC is void and unenforceable.

“Saipan Development LLC is aware of the position of the government,” said San Nicolas in an interview Tuesday.

San Nicolas informed SDLLC about Fitial's concurrence in a letter dated Jan. 4, 2013.

That was the same day Saipan Tribune published a story where press secretary Angel A. Demapan stated that the Fitial administration anticipates the Office of the Attorney General to tell SDLLC about the governor's decision.

In the letter, San Nicolas informed SDLLC that recent analysis by the OAG that the power purchase agreement and other contracts between the CNMI and SDLLC were sufficient as to form and legal capacity was in error.

San Nicolas also told SDLLC that Executive Order No. 2012-07, which authorized Fitial to take appropriate steps to address immediate threats to public health and safety, did not provide Fitial the authority or capacity to enter into these contracts.

The other contracts referred to are the pledge and security agreement; the escrow, pledge and security agreement; the guaranty; and power plant development and management agreement.

“The contracts were void ab initio [from the beginning] as they were executed in a manner contrary to Commonwealth law,” the AG said in the letter.

Prior to this, San Nicolas issued an opinion declaring that Fitial is not liable for any cause of action related to his signing of the power purchase agreement with SDLLC.

San Nicolas said Fitial cannot be faulted because he reasonably relied on the certification of then attorney general Edward T. Buckingham that the power purchase agreement was proper as to form and capacity.

San Nicolas, however, determined that Fitial did not have the authority, pursuant to Executive Order 2012-17, to enter into the power purchase agreement with SDLLC.