CUC considering power barge

As part of efforts to solve the power woes on Saipan, Commonwealth Utilities Corp. board chair Herman P. Sablan instructed the management yesterday to explore the possible entry of a power barge that could supply the island with power for two to three years.

Sablan said this has to take place while the CUC’s main power plant in Lower Base is being privatized.

“If we award it [privatization] this year, it would take up to three years conditioning. So look at two to three years operations of barge power plants as back up,” he told the management during yesterday’s board meeting.

The chairman said a power barge could provide up to 20 percent power reserve.

“It’s just a temporary measure. So take a look at having a contract for barge power plant,” Sablan said.

The CUC last week said that there is no power reserve right now on island, which means that any engine breakdown would immediately result in power outages.

At present, about three of the eight engines in CUC’s power plant I in Lower Base are down. The remaining engines are working, but they are already overdue for an overhaul.

This developed as the utility firm is pushing for the immediate privatization of the PP1 and a smaller, adjacent power plant II in Lower Base.

CUC is currently working with a consulting firm, Harris Group, on a Request for Proposal and pre-bid evaluation work.

The CUC received a proposal last year from an offshore investor, Seaboard Ship Management Inc., a Florida-based company that specializes in barge power plants.

In its onsite study of CUC’s main power plants, SSMI reported that plant systems are “very old, not being adequately maintained, and run on expensive gas oil.” These, it said, are the reasons why the cost of power generation on the island is high.

“The equipment available for generation of power is outdated, inefficient, and represents a mix of really old engines being utilized as base power units for power generation,” the report said.

It also said that CUC’s power transmission and distribution system is “generally old, inefficient, and is overextended beyond its original capacity, causing hefty line losses.”

The transmission system requires essential improvements and upgrading, including the installation of a new high voltage transmission line with substation to connect the existing and expanding grid system.

SSMI cautioned that maintaining the status quo would mean higher operational and maintenance costs.

“The privatization of power generation is very much needed to provide expanded, reliable, and cheaper power,” said the SSMI.

In its proposal, the company said the existing power plants should be replaced with possibly 35 to 55 MW of new and efficient power.

It also said there is a need to install a new 69 KV transmission line loop and a substation to connect lower voltage transmission and distribution systems.

In exchange for its proposed upgrade, operation, and maintenance of power plants, SSMI seeks a long term IPP contract with the CUC.

SSMI is a wholly-owned subsidiary of Seaboard Corp., which operates, maintains, and manages vessels and power plants. It presently manages 18 ships and two power plants in the Dominican Republic.

The CUC has four power plant generation facilities on Saipan: two in Lower Base, one in Puerto Rico, and one in Isley Field, which is currently inoperational. These are now valued at about $104 million, from $109.4 million two years ago.