Power privatization effort losing steam?

The Babauta administration seems to be having second thoughts about the power plant privatization program, now that it has spent millions of dollars on engine repairs.

In a public briefing on the power situation yesterday, Gov. Juan N. Babauta said he was not ready to report on the status of the power plant privatization program, which was reportedly supposed to have been completed by this month.

Babauta explained in an interview later that the U.S.-based consulting firm Economists.com was still evaluating the financial background of the two bidders for the $60-million contract: Telesource and Rolls Royce Power Ventures, which is represented locally by Pacific Marine Industrial Corp.

Economists.com is also reviewing whether privatization is still practical since the government has already performed a considerable portion of the scope of work that was supposed to be conducted by the winning independent power producer, he said.

“We’ve already done a lot of what is in the request for proposal. The project needs evaluation,” Babauta said.

According to the governor, the local and federal funds reprogrammed to the Commonwealth Utilities Corp. for engine repairs now total $5 million. About $1.5 million is spent on refurbishing generators at Power Plant 1 alone.

On top of this, the government has paid CUC $14 million for utility service in fiscal year 2005.

A request for proposal for the privatization project has been in place since 2003.

CUC has hired Harris Group at an initial cost of $103,000 to handle the bidding process. But due to extended service, the contract amount has already reached $200,000, sources said.

Working on behalf of CUC, Harris Group had put out a request for proposals from independent power producers to modernize, upgrade, operate, and transfer Power Plants 1 and 2.

The privatization project also entails an IPP installing two 15-megawatt generators at the Lower Base power plants, among other things.

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 has already been privatized. It is run by Pacific Marine Industrial Corp.