Looming fiscal crisis at CUC

Epiphanio E. Cabrera Jr. speaks during the public comments portion of the Commonwealth Utilities Corp. board meeting last Friday.

The CNMI government is about to receive a $25-million grant from the U.S. Environmental Protection Agency for the installation of solar panels on rooftops of homes in the CNMI and this is expected to take a big chunk out of the Commonwealth Utilities Corp.’s electric power base load.

Also, this is projected to have a ripple effect over the cost of fuel and fuel delivery to the CNMI, according to Epiphanio E. Cabrera Jr., who is the state clearinghouse administrator for the Office of Grants Management, on Friday.

Speaking during the public comments portion of a CUC board meeting, Cabrera advised CUC to prepare as this project for residential solar power and other renewable projects will have a fiscal impact on CUC in the next year or two.

Cabrera, who is also a member of the CNMI Energy Task Force, disclosed that they just got word that the CNMI government is about to receive $25 million in EPA grant for residential rooftop solar power.

He said if their numbers come out correctly, this translates to about 25 megawatts of electric power, which is a big chunk of CUC’s base load. Cabrera said this will have a ripple effect on the cost of fuel and the fuel delivery to Rota, Tinian and Saipan.

He said they are expected to get at a minimum of $25 million and up to $100 million for residential solar and that they are submitting the formula grant by Aug. 19, 2023.

Cabrera said it’s a formula grant so it’s guaranteed and all of the renewable resources tied to this project is scheduled to be deployed in July 2024.

As per the conditions of the grant, it is expected to generate 25 megawatts, all for residential, with at least 10 kilowatts distributed per household. He said at least 2,500 households will benefit from the project.

Cabrera said they have projects that are scheduled for the Commonwealth Healthcare Corp. (phases 1, 2, 3, and 4) that are ready to go next year. There are a total of eight phases of the projects intended for CHCC and he said that, once all eight phases are in place, this would decrease CHCC’s utilities by 72%.

He said there are also talks about having the Francisco C. Ada/Saipan International Airport on 5 megawatts of renewable energy.

Cabrera said the Public School System already has 3.24 megawatts that are still offline, but it will go online by August, according to the company that is doing the project.

Right now, there are private home with solar power installations of about 3.5 megawatts.

“So I’m giving advance notice to please prepare because this will affect your compensation plan, all your planning, and all future renewable projects for CUC,” Cabrera told board members.

In addition, the OGM administrator said, they are pushing for 1 megawatt of installation of solar per year, using all their Energizing Insular Communities funding.

“That’s [going to] take time, but it’ll get there,” said Cabrera as he disclosed they are also pushing for a financing program for renewables for the indigent, the elderly, and the veteran population.

He said CUC might get hit hard in the next year or two.

The OMG administrator added that the Commonwealth Office of Transit Authority was approved a $1.4-million solar grant, the library got a $1-million solar grant, and the Department of Corrections just got approved for another $1-million solar grant.

He said there are also talks about bringing green hydrogen to the CNMI. Cabrera said the current cost for green hydrogen is $1 million for 500 kilowatts.

In essence, he said, supplying Rota, for example, will cost less than $4 million to supply a full 24-hour power for the entire island.

Cabrera said this will affect all the supply chain issues with fuel.

On the other side, he said they have the EIC grants and all the congressional earmarking that are guaranteed coming in.