CUC defends position

Disappointed with remarks made by Saipan Chamber of Commerce on the controversial power project, Commonwealth Utilities Corporation Executive Director Timothy P. Villagomez assured the business community that scrapping the 80-megawatt plant will save the agency from potential bankruptcy.

In an open letter addressed to the business organization, the utility chief justified the decision made by CUC board in its meeting last Thursday as he said it was intended to the bring down the costs associated with a project that is not needed by Saipan at this time.

Mr. Villagomez’ reaction came following the remark of Chamber President Lynn Knight who warned that canceling the initial request for proposal for the 80-MW plant would send a wrong signal to outside investors who might be turned off by this case.

Ms. Knight was among the dozens of lawmakers and other individuals attending the meeting of CUC directors who voted to scale down the project to 60-MW plant citing continuous economic difficulties and declining power demand on the island.

“Realizing this decision would impact every person and business on the island, the board risked criticism to make sure it would not take the corporation and all its customers into a debt scenario that would last for years, lead to higher utility rates and jeopardize public control of the utility function,” said Mr. Villagomez in the letter.

“The Chamber should be asking whether a utility, over-extended and burdened with debt would attract new investors to the island,” he added.

Noting building the new power generation facility will take the same time as the initial plan, Mr. Villagomez stressed CUC is committed to providing Saipan residents and businesses a reliable source of electricity at a much lower cost.

He also maintained that by ensuring that the size of the project is actually what is necessary for the island, the utility corporation is trying to avoid the mistakes committed in the past when procuring government projects done in haste.

“CUC has tried to avoid these pitfalls and act responsibly throughout this procurement despite an unprecedented level of pressure and lobbying from companies that are giants in the power industry,” said Mr. Villagomez.

Drawing comparisons with how local companies have made re-adjustments in light of the economic crisis confronting the CNMI since 1997, assessing the need for a project with such magnitude was all part of CUC’s efforts to make the right decision.

“CUC is arriving to provide the community with adequate, low cost power, now and in the future. We have always been ready to talk with the Chamber, with businesses and cooperate with community needs,” explained the utility chief.

“We hope that relationship will continue and that the Chamber and its members will look at the actions of our board from a business perspective and see that buying more than we need for more than we can afford does not make good sense,” he added.