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Telesource: Privatization is the answer to power crisis
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Posted on Jul 27 2005
One of the proposers in the power privatization on Saipan said that, while the Commonwealth Utilities Corp. can keep operating the power plants, it is privatization that will ensure efficient operations, thus preventing power outages on the island.
“The CUC can choose to do nothing. They can continue to run the power plant as they have been, contrary to the stark realities and common sense, but privatizing it, which means proceeding with the RFP, answers the needs of the CUC and the CNMI people in total, not in a piecemeal bandage approach,” said Telesource CNMI president K.J. Semikian in a statement.
He also refuted claims that privatization would increase utility rates. Privatization, in fact, would save CUC money “and reduce the ultimate true costs on the CNMI taxpayer.”
“The cost of power generation represents a small part of the true cost of the power we use. Generation costs do not include the cost of fuel. By privatizing the power plant, the cost of generation will be fixed for 20 years and the only part of the overall power costs that will change will be the fuel costs,” he said.
He said that the cost of fuel can go up and down, depending on the world prices.
Under the privatized agreement, CUC would provide fuel to the winning proposer.
Semikian said that no utility should really ever shoulder the cost of the fluctuating fuel.
“It is unreasonable and irresponsible to expect the utility to subsidize the fuel price differential. No one is subsidizing us at the gas station when we fill up our cars, so why should anybody expect to be subsidized for the fuel that is needed for electricity,” he said.
Semikian warned against politicians whom he said have the tendency to make general confusing statements “designed to protect their interests” during an election year.
