The Commonwealth Utilities Corporation will bring down its electricity rate for the Voice of America relay station on Tinian following an agreement that it should bear the cost of hooking up with the newly opened power plant on the island, officials said.
The reduced rate is expected to remain for two years and will likely be equivalent to 11 cents per kilowatt-hour which is being charged to residential customers on Tinian by CUC, according to Executive Director Timothy P. Villagomez.
It is five cents lower than the 16 cents power rate set by the government-owned utility firm for commercial users that include federal agencies in the CNMI.
Villagomez said they have agreed to grant the VOA request after the federally-owned public radio had estimated that they need to spend between $800,000 to $900,000 in installation cost when the Tinian relay station hooks up with the island power.
“Our position is that they should incur that cost,” the utility chief said, “and we could give them possibly a rate for the next two years (that is) nothing less than the 11 cents.”
A memorandum of understanding between VOA and CUC is currently under negotiations and will be submitted soon to the board for approval, Villagomez said.
Rushing completion of the relay station, VOA will be a major consumer of the new 10-megawatt power plant on Tinian which began its operations last week.
Last year, Robert Koeberlain, construction manager for the U.S. Information Agency which runs the radio, asked CUC to reduce the current power rate to make it at par with the estimated costs if VOA installs and generate its own electricity.
The radio is expected to start broadcasting in the next few weeks, using initially an on-site generation equipment to power baseline transmitters that require about three megawatts of electricity.
It will source power from the CUC plant when the Tinian broadcasting facility expands with bigger transmitters requiring up to five megawatts.
CUC previously had balked at the proposal due to a precedence it will set as well as potential impact on the revenues from the plant built at a cost of $12 million which might not be sufficient to meet its financial obligations to its private contractor.
Any change in the power rate could alter the initial plan on the plant, including a proposed expansion into a 30-MW facility that will provide electricity to several development projects being mapped out for Tinian, according to utility officials.
But Villagomez expressed optimism that with the anticipated growth of the island’s economy, CUC will earn money and pay back Telesource for the cost of building and operating the power plant.
“Hopefully, new commercial development projects will happen on Tinian and things are going to work out for us,” he added.