Reyes calms CUC’s fears of power rate hike

Senate Floor Leader Pete P. Reyes assured the Commonwealth Utilities Corporation that his proposal reinstating the 80-megawatt power plant on Saipan will not lead to higher electricity rates for both residential and commercial customers.

He said the bill is in fact seeking the retention of the price offered by bidders on the proposed plant despite rising inflation in order to ensure that power rates will not go up once it becomes operational.

“I think CUC is reading too much into the bill. There’s nothing in there that says that power rates will be increased,” Mr. Reyes told in an interview yesterday.

The senator was reacting on the latest statement by CUC Board Chairperson Rosario M. Elameto who said last week that the government-owned utility corporation is ready to support the legislation if there is an assurance that the project will not hike electricity rates on the island.

In an apparent sign that they have caved in to pressure, Ms. Elameto said the board is not asking Gov. Pedro P. Tenorio to veto the measure, they merely want clarification on its intent.

Senate Bill 12-19, now pending before the governor’s office for final action, will force CUC to abide by the original request for proposal issued three years ago on the 80-MW power plant. It will also invalidate earlier board decision to re-bid the project with a smaller capacity.

“The intent of the bill is to reinstate the RFP and to retain the price offered by bidders as early as 1997 so that the cost of the project will not be higher than initial projection,” said Mr. Reyes.

Meeting

According to the senator, who has strongly opposed efforts to mothball the project in favor of a 60-MW plant, he is willing to meet with CUC officials to clarify the legislative move.

“I have always advocated the position that it would be better us to work with CUC on this project so that we could iron out whatever differences we have,” added Mr. Reyes.

Ms. Elameto and other utility officials met last week with the governor to discuss the pending proposal where he instructed them to meet with the Legislature. Mr. Tenorio, however, said he has yet to decide whether he will sign the bill or not.

CUC apparently wants the much delayed project rolling, but it is hoping that its concerns are addressed in the bill before awarding the $120 million contract — touted to be the biggest ever in the island’s history — to any of the top bidders.

The utility corporation, under fire in recent months because of its actions on the project, expects to narrow down the final selection to the three front-runners — Enron, the Tomen Consortium and SPP/HEI which received the highest scores in the independent evaluation conducted last year by Burns & McDonnell.

Ms. Elameto has said that they want to award the contract to the proposal with the lowest bid to ensure that CUC customers who will be supplied with power generated by the proposed plant will not be paying higher electricity rates.

Both the consortium and the SPP/HEI partnership have claimed to have cheaper offer than Enron, saying that their proposal on medium-speed, diesel-powered engines is a lot less costly than the low-speed generators submitted by the Texas-based industrial giant.

The two power firms have in recent weeks urged Mr. Tenorio to veto the bill in fear that it would eliminate competition and award the project to Enron, citing a provision that stipulated that engines to be installed in the new Saipan plant will only be low-speed generators.