‘Babauta violated rule on emergency declaration’

House Speaker Benigno R. Fitial accused Gov. Juan N. Babauta yesterday of keeping the Legislature in the dark and failing to comply with statutory requirements in relation to the state of emergency declaration at the Commonwealth Utilities Corp.

In a letter, Fitial demanded that the governor immediately transmit a letter notifying the Legislature of his intent to extend the emergency declaration and a detailed report of his plans with regards to solving CUC’s problems.

“The Legislature is here to assist you in stabilizing CUC and securing public utilities to the people of the Commonwealth. However, the Legislature cannot assist you if you do not comply with statutory requirements and keep the Legislature apprised of your plans,” the speaker said.

Citing CNMI law, Fitial noted that the governor, upon using his authority to declare a state of emergency, was required to submit to the Legislature “as soon as practicable” a plan detailing the emergency.

To date, however, the governor has yet to provide the lawmakers such a report regarding the May 19 declaration. “[Rather] the Legislature has received minute details of your plan in the form of commentary in transmittal letters disapproving appropriation bills because you have reprogrammed funds arguably pursuant to your emergency powers,” said Fitial.

The speaker also pointed out that some of the governor’s actions pursuant to the state of emergency require legislative approval.

He cited as an example the $10-million guaranty that the Marianas Public Land Trust had agreed to provide CUC for its fuel contract, which the Governor’s Office recently executed with Mobil Oil Marianas Inc.

He argued that legislative approval was necessary before the government could incur a public debt.

Fitial also said Babauta has extended the state of emergency for another 30 days without following proper procedure, which includes notifying the presiding officers of the Legislature of the extension before the expiration of the initial 60-day period.

He further said that the governor’s reasons for extending the state of emergency were inconsistent with the reasons for the initial declaration.

Babauta’s goal for the May 19 declaration was to secure a long-term fuel contract for CUC. This was accomplished with the contract signing between CUC and Mobil on June 3.

Last Monday, the governor said he was extending the state of emergency due to CUC’s “lack of ‘back up’ or reserve power generation capacity; the continued need to initiate critical maintenance and repair of power generation facilities; and the uncertain financial condition of CUC and its ability to make all required fuel payments, especially given the proposed repeal of CUC’s ability to impose a fuel surcharge.”

Privatization of CUC’s power plants is seen as the solution to these problems.

According to Fitial, it is too late for the Governor’s Office to be involved in the privatization process. He said that CUC had already spent a huge amount to hire the Harris Group consulting firm and the selection of an independent power producer was almost done.

“These are matters best left to the CUC management and its board. If you are not confident in the board’s ability to manage CUC, then the proper procedure is to remove the directors and appoint new directors that are capable of properly doing the job. Taking over CUC and micromanaging the corporation is not the proper way to secure CUC’s existence and stability,” said Fitial.