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Monday, April 21, 2014

Fitial, Buckingham signed off on a nuclear energy ‘pre-deal’
Inos admin reviews newly surfaced document

Two months before signing off on a sole-source $190.8-million diesel power purchase agreement for 25 years with Saipan Development LLC on Aug. 3, 2012, former governor Benigno R. Fitial and then attorney general Edward Buckingham signed a preliminary deal with another firm for a 50-megawatt safe nuclear energy production plant, subject to certain conditions such as financing and regulatory approval of the technology.

This document appeared only last week on the desk of Gov. Eloy S. Inos, who assumed his post on Feb. 20 when Fitial resigned days before the start of his impeachment trial at the Senate.

Inos confirmed yesterday that Fitial and Buckingham, along with Global Energy Corp., signed off on the document in June 2012.

“We are going to review it,” Inos said in an interview with Saipan Tribune and KSPN 2 at yesterday’s Covenant Day celebration at the Minatchom Atdao pavilion in Susupe.

He said the document will be forwarded to the Office of the Attorney General for review.

Inos wants the OAG to determine whether the CNMI has a liability or obligation to fulfill under the document that the former governor and former AG signed.

“From my initial review, it doesn’t look like it’s a firm contract. It was essentially memorialization of a desire of the Commonwealth government to avail of that technology but there are conditions precedent to entering into that contract like securing financing and studies, approval of the technology which has yet to be approved, and so forth… It’s long ways from being a contract that can be executed in terms of the provisions but it is interesting that we have that,” Inos said.

The Inos administration said a study will be done on the integration of alternative or renewable energy into the existing Commonwealth Utilities Corp. power grid.

The new, patent-pending, nuclear energy technology that GEC presented to the CNMI administration and Legislature last year is based on fusion and fast fission. It uses (fertile) Uranium 238 and not the (fissile) Uranium 235 of conventional nuclear technology. Uranium 238 is plentiful in nature and in non-radioactive nuclear waste.

House Vice Speaker Frank Dela Cruz (IR-Saipan) said over the weekend that the nuclear energy document is a “pre-agreement that will lead to a PPA subject to meeting the requirements as set forth.”

House Speaker Joseph Deleon Guerrero (IR-Saipan) also said in his view the document “does not bind the CNMI to anything.”

For one, the technology proposed has yet to be approved by the appropriate federal regulatory agency.

A month before Fitial and Buckingham signed the pre-agreement document last year, then CUC executive director Abe Malae, CUC deputy director for electric power system Wallon Young, and Dela Cruz made recommendations to Fitial after they returned from GEC presentations in California about this particular nuclear energy production.

Malae, Young, and Dela Cruz recommended that CUC sign a commitment letter to allow Global Energy Corp. “to shop for financing for a 50-megawatt plant” estimated at $250 million.

Fusion and fast fission nuclear reactions do not involve any chain reaction, and so can be stopped in a straightforward manner without danger of runaway core meltdown. There are no dangerous or potentially dangerous waste products and cooling is done using helium instead of water, they said.

Fitial and Buckingham signed off on the nuclear energy document around the time GEC scientists and officials, including CEO Dr. Jay W. Khim, visited Saipan.

Inos said yesterday that Fitial may also just be trying to find ways to lower the cost of power, including tapping renewable or alternative energy.

“I just hope that this latest document does not create any kind of liability to the CNMI government, any obligation at all…. Again my initial review of the document, it doesn’t look like there is any contractual obligation on the part of the CNMI government but you know I’m gonna have to leave it up to the attorneys to tell me if there is,” the governor added.

The nuclear energy document signing was done two months before Fitial and Buckingham signed on Aug. 3, 2012, a PPA with SDLLC for a 50-MW diesel generated power plant in Lower Base.

Around August 2012, Saipan Tribune started inquiring with the Fitial administration about the nuclear energy agreement but nothing came out of the inquiry until the document surfaced last week.

If and when the two agreements materialize and are pursued in their current form, the Fitial administration would have committed CNMI taxpayers to a total of 100MW of diesel and nuclear power.

Fitial was impeached by the House of Representatives on 18 charges of corruption, felony and neglect of duty related to a host of issues including his signing of the PPA with SDLLC, which is also now in the court.

Should the CNMI pursue the safe nuclear energy pre-agreement, the next step after shopping for financing would be to negotiate a rate that is close to 15 cents per kilowatt-hour, under a build-own-operate transfer arrangement over a 20-year period.

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