Legislature, CUC set stage for Saipan power plant bidding

Lawmakers and utility officials yesterday agreed to forge ahead with the much-delayed power project for Saipan, this time by working closely together during the forthcoming bidding process that the Commonwealth Utilities Corporation will undertake by next month.

In a meeting between members of the Committee on Public Utilities, Transportation and Communications from both houses of the Legislature and CUC Board, questions on the controversial project were raised, while mapping out next course of action by the government-owned utility corporation.

Senate Vice President Thomas P. Villagomez, PUTC chair in the upper house, said the Legislature had asked the board to get its inputs and recommendations on the project before it invites bidders to offer proposals for a 60-megawatt power plant.

He said the meeting was an attempt to resolve remaining issues over CUC’s decision to scale down the size of the plant from the initial 80-MW capacity, which has angered some members of the Legislature.

“We are looking into the 60-MW project which will go to a bidding process with pre-bid qualifications,” said Mr. Villagomez in an interview, adding that the contract to build the plant will be awarded to a firm with lowest price.

But the Legislature is hoping to meet with independent consultants hired by CUC first before any invitation to bid is issued to answer other questions from members.

Burns & McDonnell, the Kansas City-based engineering firm which conducted a second evaluation on the 13 proposals handed in since 1997 as well as the assessment of the island’s power requirements, is expected to prepare the bid package.

During the meeting, Sen. Ramon S. Guerrero pointed out that Enron, which got the highest scores in the final round of independent evaluation, would not have topped the procurement on the 60-MW plant, citing his own analysis of the proposals.

The Houston-based industrial giant had been hoping to win the $120 million contract — touted to be the largest deal ever in CNMI’s history — had CUC pressed ahead with the initial plan.

The board early this month scrapped the 80-MW plant in favor of a smaller project, invalidating all the previous offers. It cited findings by Burns & McDonnell that the island will not need such a huge capacity in light of the continuous economic crisis confronting the CNMI.

Board members met last week with Gov. Pedro P. Tenorio and some senators, including Mr. Villagomez, to answer their questions on their decision and yesterday’s meeting was a follow up to that discussion.

It is still not clear, however, whether the Legislature will have to provide full faith and credit backing to the project even with a lower capacity as CUC officials insisted during the meeting that they can do without such support with the new bidding.

“One thing that the board must realize is that if they are going to float the bond, they will need the support of the Legislature,” Mr. Villagomez explained. “[CUC officials] feel confident that they can have this rolling and provide us with 60 megawatts without legislative support.”

But he stressed that lawmakers need to work with the utility corporation on this issue to guarantee that the power project will be built at all. “That’s why we want to be part of the final bidding,” said the senator.