BEFORE HOOKING UP Dynasty wants power rate cut

Posted on Jun 11 1999

It may take a while for the new power plant on Tinian to provide electricity to its biggest customer as the Tinian Dynasty Hotel and Casino asked for leeway from the Commonwealth Utilities Corporation in view of its shaky financial condition.

The problem-ridden casino has apparently appealed for waiver of fees and lower power rate as part of the terms if they decide to hook up with the 10-megawatt plant that opened last February.

The power plant had been specifically planned by CUC to address the needs of Dynasty and the Voice of America relay station which, under their agreement with the CNMI government, must source their electricity only from Tinian’s main system despite having their own generators.

But CUC officials have frowned on the request as it would set back its initial plan on their Tinian operations that will call for expansion of the power plant to three times than its present capacity in the next few years.

CUC Chairman Juan S. Dela Cruz said the board will have to weigh the request “seriously,” looking into possible impact on their projected revenues on Tinian.

“At this time of economic crisis, a lot of people also need help, not just the casino,” he told in an interview. “Business is a gamble and if you lose money, that doesn’t mean the government has to get involved and help you out.”

Although the board has yet to consider Dynasty’s appeal, company executives have already written to CUC management pleading for adjusted rate — from 16 cents to 11 cents per kilowatt-hour — as well as grace period of up to two years when they get connected to the island power.

“Because of the economic downfall right now, they are requesting for an extension (whether they can) be hooked up at a later date or an adjustment of rate,” said Gregorio Castro, CUC deputy director for Tinian.

A copy of the letter was not provided to the media during a recent CUC board meeting when the issue was discussed and Dynasty officials could not be reached for comment.

This is not the first time that the government-owned utility firm has faced difficulties in dealing with the casino as it has threatened to cut off its water service to the Dynasty several times in recent months when it failed to pay its bills on time.

Scheduled to hook up last April: Dynasty was also supposed to start using island power last April when it would have installed a transformer to hook up with the CUC system, on condition that it pays first a security deposit estimated at about $400,000.

Required by the government-owned utility firm to all its customers, the deposit will cover two months of their average consumption of electricity.

While the transformer has been brought to the island, Castro told a board meeting last Wednesday that the Dynasty has yet to install the equipment as the distribution line has not been put up.

In a separate interview, CUC Executive Director Timothy P. Villagomez said they don’t see any problem giving the casino time deferment, but stressed request for rate reduction and waiver should be addressed to the board.

“I have to work closely with all business entities,” he explained. “Working with them is not a problem. If they are asking us to change policies or rates, that’s an issue beyond my control. I don’t think it’s fair that one entity will get something over the other.”

Asked what CUC requirements which the Dynasty has requested to be waived, Villagomez said that they “have to look at it.”

This is the second request received by the utility corporation for rate adjustment on its Tinian operations. The VOA facility on the island has been given the residential rate of 11 cents per kilowatt-hour under an agreement forged with CUC earlier this year.

According to Villagomez, the federally-owned radio station has agreed to put up more than $1 million worth of improvement on Tinian, including installation of power poles and distribution line, in exchange for the lower rate.

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