Puerto Rico power plant seeking expansion

Expressing confidence that it can adequately provide more power, the operator of the Puerto Rico power plant is pushing for a revision in its 14-year-old contract with the Commonwealth Utilities Corp.

At the same time, the contractor, Pacific Marine & Industrial Corp., noted in a June 8, 2004 letter to CUC executive director Lorraine A. Babauta that “we are delivering capacity… well in excess of our contractual obligations.”

PMIC senior development manager Stephen P. Green said that “in light of the current supply difficulties and adverse press coverage of the situation,” it feels that it is time “to revisit the proposals for improvements of the electricity supply services that we have previously placed before you.”

He said that in a presentation to the CUC board in May, PMIC offered “without the need for any capital investment by CUC” to relocate to Lower Base and to increase its capacity by installing “brand new, state-of-the-art, high fuel efficiency generators.”

He said the relocation would address Puerto Rico residents’ concerns about noise and air pollution.

At the same time, the plan would save CUC millions of dollars in fuel expenses and address the growing capacity needs of the island, he said.

Further, PMIC said it is willing to install additional capacity on a temporary basis to alleviate the immediate supply situation.

CUC said it currently lacks a power reserve, resulting in power outages when any part of the system breaks down.

CUC power plants 1 and 2 in Lower Base reportedly supply 53 MW and 3.4 MG respectively, while PP4 supplies 12.40 MW. Under normal conditions, PP1 and 2 should be supplying 81.2 and 15 MW respectively, and PP4, 19.5 MW.

Saipan daily consumption is said to be at 120.2 MW.

In his letter, Green said PMIC takes its responsibility of providing a reliable and dependable level of service seriously.

“Ensuring that we meet our obligations to CUC is our number one goal, as it has been for the past 14 years. We are happy to report at this time we are delivering capacity…well in excess of our contractual obligations,” he said.

In August 2003, CUC’s Babauta reported to the board that the privatized operations of Power Plant 4 proved “unreliable” as shown by the power outages affecting a large portion of Saipan at that time. She said that power outages could have been prevented had the power plant been running at its expected capacity.

“Power Plant IV, which is our first experiment at a ‘coop of privatization’ has failed us,” Babauta had said.

CUC said the plant normally provided CUC with 10 MW but its production was suddenly reduced to only five MW in late July, and further down to 3 MW in early August.

The plant’s produced power ends up being distributed mainly to Feeder 3 or the Middle Road area. The plant, which was privatized in the early 1990s, consists of five generators.

The CUC said the plant suffered “extensive difficulties with its production program,” resulting in the massive reduction in production.

Babauta had said that “our coop-privatization partners are still running quite below contract specifications.”

Babauta’s statement came shortly after the board’s majority approved the solicitation of proposals from contractors to privatize the operations of CUC’s main power plants in Lower Base.

The power woes on Saipan surfaced lately even as the CUC board’s leadership revived the idea of privatizing the plants.