Kumoi’s report: Emergency declaration needed

Former senator Ramon “Kumoi” Guerrero actually recommended in his report that the governor’s state of emergency declaration should be extended over 60 days.

In a 47-page report, which he presented to the House Committee on Public Utilities, Transportation, and Communications on Monday, Guerrero said that considering the on-going work in the power plants, “It is my official opinion than extension of the state of emergency be enacted, or an executive order be issued.”

Guerrero said Monday that he submitted his report to the governor about a month ago.

The governor extended the May 19 emergency declaration for another 30 days on July 19.

In his written report, Guerrero said the extension would give the Commonwealth Utilities Corp. additional time to complete its work “on the emergency capacity CUC requires to prevent or reduce the unexpected rotating power outages.”

“If these recommendations are not exercised, and the state of emergency is lifted, everything that we have strived for, to prevent power outages, will have been in vain and the rehabilitation of Power Plant 2 and Power Plant 3 will collapse, if the present CUC board is re-activated,” said Guerrero.

Guerrero, further, advised the governor that an “executive order” would also allow CUC additional time “to scrutinize the privatization issue.”

However, when asked by Rep. David Apatang Monday if he thinks the governor’s extension of emergency declaration is necessary, Guerrero indicated that CUC could be helped without a state of emergency.

He said the government could just pay off its outstanding debt with CUC and the Legislature could help the agency “ not under a state of emergency.”

Guerrero, who was tasked by the CUC to review the Harris Group privatization report, said in his finding that self-generation of power, with a 4 percent loan rate, would be the cost-effective option.”

He said this option can happen if the CUC’s debts with the Commonwealth Development Authority are written off or cancelled.

He said that CUC can also explore semi-privatization “where Power Plant 1 acts as quasi IPP and CUC pays the going rate.”

Under this setup, all repairs, parts, and labor are purchased from payments.

He said a consultant shall review the arrangement over the first two years.

“CUC will either pass or fail the IPP payment test without committing to a 20-year contract,” he said.

The CUC’s pending Request for Proposal for the privatization of PP1 calls for a 20-year agreement.

Guerrero said another option in running the power plant is Co-Op Utility, which is funded by local shareholders.

CUC said earlier that it would award an IPP contract within two months.

If this is pursued, CUC would choose between Telesource or Rolls Royce.