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CUC pursues partnership with
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Posted on Aug 10 2005
The Commonwealth Utilities Corp. is pursuing a possible partnership with Guam Power Authority on the regional purchase of fuel to save on costs.
According to CUC executive director Lorraine A. Babauta, CUC has met with GPA on the issue. She did not provide details, indicating that it is an ongoing discussion.
Earlier, senators Joseph Mendiola and Diego M. Songao, who is chair of the Public Utilities, Transportation, and Communications, met with GPA officials, whom they said are “most willing” to help the CNMI purchase cheaper fuel.
Guam currently buys its fuel directly from a manufacturer in Singapore and stores it in its own bulk plant.
Babauta said that CUC is still considering a proposal to go back to the use of heavy fuel, but she said that it is “high maintenance” and would require some $6 million to build the needed infrastructure.
She said that CUC has no functioning heating system to make the heavy fuel usable for the power plants.
She said the use of heavy fuel would save 20 percent in terms of price.
CUC currently uses diesel for its power plants.
Mendiola and Songao said that Guam uses heavy fuel oil in approximately 95 percent of its generators, which results “in a significant reduction in fuel costs as compared to burning diesel or gas fuel.”
The senators said that Guam has successfully lobbied the U.S. Environmental Protection Agency to burn the heavy fuel “in their facilities without costly compliance.”
“Based on the assumption that, if CUC is to convert to heavy fuel oil…CUC will also significantly cut cost in its fuel consumptions. This can be done through lobbying effort by both the CUC and the CNMI government for an exemption from EPA and the installation of CUC-owned fuel facility or leasing from the existing Mobil Storage facility,” the lawmakers said.
Heavy fuel oil is said to cost about $40 per barrel while regular diesel costs $60 to $75 a barrel.
