July 10, 2025

OIA will not intervene in power project controversy

The last wall of defense being used by the Commonwealth Utilities Corporation to back its controversial decision on the 80-megawatt Saipan power plant has come under question after the Office of Insular Affairs refused an appeal to intervene in this dispute.

The last wall of defense being used by the Commonwealth Utilities Corporation to back its controversial decision on the 80-megawatt Saipan power plant has come under question after the Office of Insular Affairs refused an appeal to intervene in this dispute.

OIA Director Ferdinand Aranza hinted that an agreement forged between the CNMI and Washington five years ago on its operations and management does not extend to the current squabble surrounding the procurement of the much delayed project.

CUC officials have repeatedly warned that political interference in the management of the government-owned utility corporation could result in the withholding of all Capital Improvement Projects in the CNMI by the Department of Interior.

This line of argument has come on the heels of efforts to legislate bidding of the power project to prevent CUC from scaling it down to 60 MW. Lawmakers and bidders have criticized such a plan as it would mean further delay and waste of taxpayers’ money.

The right to operate and control its own finances without interference was guaranteed to CUC by the Office of the Governor in Partnership Agreement entered into with the DOI’s OIA in 1995.

But Mr. Aranza, in a letter sent to Board Chairperson Rosario M. Elameto, said that agreement was made in response to specific circumstances existing at that time which are different from the present situation, adding that CUC and the island government have already implemented its provisions.

“While OIA remains very concerned about effective management of CUC and will support such management through our technical assistance activities, the disputed power plant project does not, to my knowledge, involve the use of any federal funds,” he said.

Hands off

Mr. Aranza, however, thumbed down a request made by Ms. Elameto in an earlier letter asking the agency to step in and resolve the rift between the utility corporation and the Legislature.

“[S]ince the legislation cited in your letter is pending but not enacted, its impact on the CUC is uncertain and prospective,” he explained. “It is therefore not appropriate at this time for this office to intervene in this matter.”

Utility officials have strongly opposed the measure passed by both houses of the Legislature, citing its impact on the Partnership Agreement and CUC’s autonomous functions.

Senate Bill 12-19, offered by Senate Floor Leader Pete P. Reyes, will force the utility corporation to stick with the original request for proposal to build the 80-MW plant despite its decision to downsize the project.

CUC canceled the RFP last January after three years of soliciting and evaluating proposals from 13 companies, citing shaky financial condition and the continuous economic difficulties confronting the CNMI which have reduced power consumption by residents and commercial establishments.

CUC’s input

The bill is now pending before Gov. Pedro P. Tenorio who, according to CUC officials, is awaiting comments from the utility corporation before deciding whether to veto or sign it into law.

But documents revealed that CUC Executive Director Timothy P. Villagomez had previously written to the governor, rejecting the move to resolve the impasse through legislation.

“We ask you, governor, to oppose this legislation, by which the Legislature seeks to usurp an executive function delegated to the CUC Board of Directors,” he said in the letter dated Feb. 9, 2000.

“We also urge you to oppose and veto the bill if presented to you because, if passed, it would do a great disservice to the people of the CNMI who would ultimately bear the cost of an overpriced plant,” added Mr. Villagomez.

One of the leading bidders, Saipan Power Partners, has also asked Mr. Tenorio to veto the measure, noting that the proposal would effectively eliminate competition and favor one company over the others.

Leave a Reply

Your email address will not be published. Required fields are marked *

Copyright © All rights reserved. | Newsphere by AF themes.