Probe on canceled 80-MW power project mulled

An investigation may be conducted by lawmakers to look into the cancellation by the Commonwealth Utilities Corporation of Saipan’s 80-megawatt power plant after the government corporation spent over half-a-million dollars for procurement of a project that took nearly three years.

Senate Floor Leader Pete P. Reyes at the same time questioned the study on the island’s power load that was undertaken by independent consultants hired by CUC based on information the utility firm had provided.

Asking utility officials to justify expenditures of at least $500,000 only to junk the project, the outspoken senator raised the possibility of the probe to determine who should be held liable for what he claimed as “wasted taxpayers’ money.”

“Who is responsible for the loss of $500,000? Is it justified waste? An investigation is in order to find out answers for these questions,” Mr. Reyes told in an interview yesterday, adding that he’s gathering information in a prelude to a possible inquiry to be conducted by the Senate.

The move followed the decision by the CUC board last week to invalidate all proposals submitted for the $120 million project and start anew for the bidding of a small scale power plant with capacity of 60 megawatts.

The expenditures incurred so far represent payment for two studies commissioned by CUC for the project, hiring of the independent power consultants as well as an outside legal counsel amid the mounting protests drawn by the project for the last one and half years.

Hundreds of thousands of dollars have also been spent for other costs, such as trips made by utility officials to Oregon to interview potential contractors, communications and other incidental expenses.

Mr. Reyes, along with Senate President Paul A. Manglona, Vice President Thomas P. Villagomez and Sen. Ramon S. Guerrero attended the board meeting on Jan. 13 in which they expressed their opposition to the plan without consulting the Legislature and the governor.

Holding a meeting with CUC at this time is now immaterial, according to Mr. Reyes, as the unpopular decision will stay even if Gov. Pedro P. Tenorio or lawmakers intervene to save the 80-MW plant.

Questionable

He stressed the board should have considered public comments first before voting on junking the initial plan and that the experts from Burns & McDonnell, the Kansas City-based engineering firm hired last year, should have been there at the meeting to answer questions.

Citing that they were only given barely enough time to absorb the report prepared by the consultants, Mr. Reyes maintained it raised questions on its credibility, particularly in view of the fact that most information analyzed were provided by CUC to Burns & McDonnell.

“Because CUC had control over input of the data, then it follows that it also had control over the output or results of their analysis,” said the senator.

The assessment made regarding the current power load on the island and the financial capability of the utility corporation to handle a project with such magnitude was the lone basis for the board’s decision to abandon the 80-MW plant.

Utility officials fear pressing the original proposal would only cost the government millions of dollars in potential liabilities in the next few years amid economic uncertainties in the CNMI.

By scaling it down to lower capacity power generation, CUC claimed at least $50 million will be saved, while ensuring that electricity rates remain affordable for both residents and businesses.

“We need to analyze this report whether those figures represent accurate and true picture of what is happening right now,” Mr. Reyes explained. “If CUC were truthful about this, then none of this would have happened. It has reached a level where it has become unbelievable.”

CUC said it is expected to announce new plans for fresh bidding of the project which officials hope to put in place in the next three years.