House wants more info on power privatization

Lawmakers yesterday demanded more information from the Commonwealth Utilities Corp about its ongoing privatization project involving the government’s power plants in Lower Base.

“Are you saying that the CUC board has already approved to go ahead with the privatization of the power plants?” asked Rep. Arnold Palacios repeatedly during yesterday’s hearing conducted by the House Committee on Public Utilities, Transportation, And Communication.

When CUC officials answered yes, Palacios then asked, “On what basis? Was there any study? Have you conducted hearings?”

Majority of the CUC board voted to pursue the privatization since summer 2003.

CUC board vice chairman Frank Q. Guerrero yesterday said that the board used a previous report that recommends the privatization of the power plants.

“There’s actually a report one-and-half year ago that requires us to hire a consultant to help us get on with the privatization. We’re now in that stage,” said Guerrero.

CUC board chairman Herman P. Sablan said that CUC is tapping the expertise of Harris Group consultancy on the project.

He said the consultant has completed the scope of work for the project’s Request for Proposal.

At this time, he said, Harris Group is looking at the project’s pre-qualification bid.

“It’s bidded out and in fact it’s closing on June 23rd,” said the chairman.

When asked by PUTC chairman Rep. Timothy Villagomez for a copy of Harris’ Group pre-bid report, Sablan said the document remains confidential and could not be released.

“It can’t be released because it has yet to be finalized,” said the board chair.

Villagomez then moved to get a copy of Harris Group’s scope of work.

Even this, according to Sablan could not be released, but he said that CUC can provide the committee with a report submitted by the consultant on the privatization project.

“This issue caught our attention because it’s a major thing. We want to know whether they have looked at garment factories’ shut down, etc. Well, I suggest that we have a separate meeting strictly on the privatization of the power plants,” said the panel chairman, who had been a long-time CUC executive director.

The PUTC chair moved to hold the hearing yesterday to discuss several issues involving CUC, particularly those relating to power and water.

Villagomez earlier asked CUC to explain and clarify reports that the CNMI’s power system is “on the verge of a meltdown.”

For his part, Sablan earlier said the situation is not yet a crisis, but he admitted that power outages are caused by old engines in the power plants.

CUC has four power plants: two in Lower Base, one in Isley Field, which is not operational; and the Puerto Rico power plant, which is being petitioned by local residents to be relocated due to noise and alleged environmental pollution.

The Puerto Rico plant is run by a private group.

CUC’s proposed privatization covers power plants 1 and 2.