CUC braces for re-bidding of power project

At least the three top bidders on Saipan’s new power plant will have the chance to bag the contract to build and operate the much delayed project under a plan to be presented to the Commonwealth Utilities Corporation board next week.

Members of CUC’s policy-making body have tentatively set its meeting on April 27, the first after Gov. Pedro P. Tenorio signed Public Law 12-1 which reinstated the original plan to install a plant with a capacity of up to 80 megawatts.

The discussion in the forthcoming meeting will focus on possible steps that the government-owned utility corporation will undertake to deal with the change in the plan, according to CUC Board Chair Jesus T. Guerrero.

He assured there will be enough support from the board to revive the 80-MW plant which was scrapped last January under the helm of its former chair, Rosario M. Elameto, due to what they claimed as financial difficulties facing CUC.

Now, under strict compliance with provisions of the new law, the board has no choice but to follow the intent of the measure. “The board will decide on what the board wants,” Mr. Guerrero said in an interview.

To expedite the project, one of the options being studied is for the board to issue a new request for proposal adding the new terms or conditions spelled out in the law, but narrowing down the selection to three top bidders that emerged in the final evaluation.

Enron, the Tomen Consortium and the Saipan Power Partners/Hawaii Electric received the highest scores from CUC’s independent consultants Burns & McDonnell in the re-evaluation conducted last year.

They will have the chance to submit new proposals to factor the new terms, such as phasing-in of a plant with initial 60-MW capacity as recommended by the power experts.

Sen. Ramon S. “Kumoi” Guerrero, a former CUC executive director and who is now proposing this option to CUC, said this will hasten the procurement process, while ensuring that Saipan gets the best offer at a reasonable costs.

“What CUC has to do is to re-word the new RFP and give them time for [the top three bidders] to submit a new proposal based on the new terms. Then that’s where the board will start the selection,” he told in an interview. “I don’t think it will take them long to do it.”

The power project, touted to be the largest undertaking ever in CNMI’s history, has drawn controversy for nearly two years since the CUC board initially awarded the $120 million contract to Marubeni-Sithe in June 1998.

The Japanese conglomerate and its U.S. partner ranked behind the three top bidders in the independent evaluation conducted by Burns & McDonnell, which utility officials hired in January 1999 in response to protests against their choice.

Just as when the rankings were done, the board asked the Kansas City-based engineering firm to conduct an assessment of Saipan’s power load — a study that led to collapse of the 80-MW proposed plant early this year due to what CUC maintained as financial risks involved in such a project.

According to Senate Floor Leader Pete P. Reyes, sponsor of the law, CUC did not follow the advice of its power consultants when the board summarily canceled the RFP last Jan. 13 without even consulting lawmakers.

That law was the result of the disapproval by members of the Legislature on the decision which they believed would entail more costs and further delay in the construction of a new power source for Saipan residents.

Envisioned to meet power demand on the island by the turn of the century, the proposed power plant is to be constructed through build-operate-transfer scheme under a 25-year agreement.