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CUC opposes PUC’s pre-approval of contracts
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Posted on Dec 10 2008
The Commonwealth Utilities Corp. agrees with most of the recommendations made by an outside consulting firm, but the executive director of the utility company feels a pre-review by the Public Utilities Commission of contracts could delay plans for engine rehabilitation.
In a written testimony, CUC executive director Antonio Muña said he agrees with a six-month levelized rate tariff with certain provisions. Currently, CUC sets their rates month to month based on the fluctuating cost of fuel. Muña said he agrees also with reviewing the set rate every six months and keeping the current electric rate in effect.
However, he said he disagrees with Georgetown Consulting Group’s recommendation for PUC pre-approval of contracts.
Muña notes that the utility company has until September 2009, when the contract for the Aggreko emergency generators expires, to rehabilitate the engines at Power Plant 1.
“Securing parts for generators requires lead times as much as six months,” he writes. “Imposing a 30-day timeline for pre-review of contracts could jeopardize overhaul completion and other maintenance.”
The detailed procurement regulations and confidentiality already slow down the process, Muña said.
“Having said that, we have uncovered, and halted, procurement abuses within that system, and intend to eliminate any other abuses,” he added.
PUC commissioners would be “squarely in the path of every repair to [Power Plant 1],” he said. “Is the real issue spending money, or how we spend money—competitive bidding or sole sourcing, for example?”
Gov. Benigno Fitial has submitted a request for $3.89 million to the Office of Insular Affairs to help pay for the rehabilitation of Power Plant 1. That money, along with $1.59 million available from other account balances, will provide $5.48 million for the rehabilitation.
Muña’s testimony will be shared during a public hearing on utility rates Friday. CUC’s and the Georgetown Consultant’s testimony, as well as the public’s, will help PUC review and set utility rates before the Dec. 31, 2008, deadline set by law. If the PUC fails to meet this deadline, CUC will be forced to reduce power rates down to 17 cents per kWh.
