CUC welcomes probe on 80-MW project

Unfazed by calls for investigation into the controversial Saipan power project, the Commonwealth Utilities Corporation yesterday allayed fears that a new round of bidding for a smaller scale plant will incur huge expenditures of public funds.

Utility officials likewise fended off criticisms leveled by some lawmakers over its decision to scrap the initial 80-megawatt plant, saying the Legislature had been informed every phase of the project since the request for proposals was issued three years ago.

“CUC welcomes any inquiries regarding the decision to cancel the RFP,” said Board Chair Rosario M. Elameto in a statement, the fourth released by the government-owned utility firm in five days regarding the power project.

“We are not worried about any investigation into our decision,” added the chairperson as she urged the Legislature, the public and the media to read the report made by CUC’s independent consultants that recommended such an action.

Responding to accusations of mishandling the three-year procurement process for the proposed plant, Ms. Elameto stressed the board is just complying with several recommendations offered by Office of the Public Auditor as well as by independent engineering firm Burns & McDonnell during the course of the bidding.

Its decision to cancel the original RFP and downsize the plant to 60 MW power generation facility as suggested in the final recommendation was part of that process, according to the CUC chairperson. “What is so hard to understand?” she asked.

Oversight

Senate Floor Leader Pete P. Reyes and Rep. Diego T. Benavente the other day called for a probe into the action made by the utility corporation last week in efforts to determine whether officials handled the procurement properly after spending more than half-a-million dollars for a project that has yet to benefit the public.

At the same time, Mr. Reyes cast doubt on the credibility of the study conducted by the Kansas City-based engineering firm assessing the current power load on Saipan when CUC provided all the information that led to its recommendations.

But CUC Executive Director Timothy P. Villagomez maintained revisions on the study made by R.W. Beck in 1993 had to be undertaken in light of the current economic conditions in the CNMI.

“[T]he outside evaluation has helped keep our project scope at the right level,” he said in the statement. “We believe that we will be able to complete the bidding on the project with very little additional cost.”

Mr. Villagomez pointed out that the money spent in developing the project “has not been wasted.” citing that the Beck study was the most expensive that cost CUC about $200,000. That report recommended the 80-MW plant and projected that power demand on Saipan would continue to grow.

According to CUC’s latest statement, energy demand on the island was growing at a rate of 8.5 percent per year when the project was mapped out in 1997. But the latest report indicated that economic situation “had changed load projections and that the best size for a new Saipan power facility is a 60-MW expandable plant.”

Burns & McDonnell, hired by the utility corporation last year amid mounting protests on its earlier choice of Marubeni-Sithe, ranked Enron, Tome Consortium and HEI/SPP higher than the Japanese conglomerate in its final phase of re-evaluation completed in October 1998.