CUC seeking waiver on green energy mandate

The Commonwealth Utilities Corp. has asked the Public Utilities Commission to waive the law mandating it to meet renewable energy requirements until September 2010, saying the utility agency needs time to develop its financial and technical capability.

Under Public Law 15-87, CUC was required by Dec. 31, 2008, to produce 10 percent of its power using renewable sources—a goal that was not met. The percentage of renewable sources—including wind, solar, geothermal, ocean current and energy efficient—is to increase to 80 percent by the end of 2014. The law allows CUC to petition PUC for a waiver if it is unable to meet the standards in a cost-effective manner or because of unforeseen circumstances.

Right now CUC must work on rebuilding its finances, CUC said in the petition to PUC. Also, the utility agency noted in the petition, renewable power sources available on Saipan are cannot be delivered 24 hours a day seven days a week.

“A utility system must be ready to meet its customers’ needs always. We burn oil because, once we have it, and once we maintain our engines properly, oil can provide us with electricity 24/7,” the petition stated.

By contrast, CUC added, wind power is only available about 40 percent of the time and solar power only when the sun shines. Ocean currents may one day be a good source for the CNMI, but the technology is still being developed.

Moreover, because CUC cannot borrow money and has no cash reserves, it cannot buy the equipment necessary for producing renewable energy.

The utility agency must first work on restoring its power generation and distribution system, the petition stated.

“CUC must also fix its own system first, because most of the renewable power it is likely to find will require 24/7 backup from oil generation,” the petition said.

But CUC has taken initial steps to meet the law, according to the petition. First, the Attorney General’s Office has developed regulations for net metering, which, under PL 15-87 offers the private sector a way to meet the requirements.

Second, CUC, along with the Water Task Force and the Office of the Governor, has partnered with the federal government to determine if there is a geothermal source under the island of Saipan.

Also, the petition stated, the utility agency hopes to tap into the economic recovery, renewable power funds which the Obama administration is expected to create.

The utility agency is also asking PUC to push back the March docket where the matter would be taken up, and instead schedule it for September 2009.

Meanwhile, several lawmakers on Capital Hill yesterday expressed frustration with Gov. Benigno Fitial’s latest state of disaster emergency for CUC. The utility agency has been under a state of emergency for seven months and is expected to remain under an emergency for as long as the Aggreko generators are in place, in order to bypass procurement regulations and air quality standards.

“I think the emergency order is to keep everyone at bay,” said Rep. Heinz Hofschneider.

House Speaker Arnold Palacios said he is disappointed he has not heard back from CUC executive director Antonio Muna regarding a letter he wrote a few months ago inquiring about CUC’s current status.

“Nobody knows what the plan is. I know we hired an engineer,” he said, referring to new deputy director for Utilities Systems Rehabilitation Wallon Young, who will oversee the rehabilitation of the engines.

The Legislature received word that $3.8 million in federal funds was reprogrammed for the engine restoration, but “other than that I believe we’re in the dark on the timeline,” Palacios said.