CUC scrambles for funds to ensure fuel delivery soon

Commonwealth Utilities Corp. board chairman Frank Guerrero said the utility firm needs to put up $1.5 million by Friday to ensure fuel delivery to Saipan on that day and avert power outages during the holidays.

CUC’s power plants 1 and 4 in Lower Base and Puerto Rico, respectively—which supply power to most parts of Saipan—have run low in fuel.

Guerrero said the remaining fuel for Power Plant 4, which supplies power to the Commonwealth Health Center, would only last today, prompting the emergency implementation of power load shedding.

Fuel stock for Power Plant 1, which supplies electricity to most parts of the island, including the Garapan tourist district, would only last until this coming weekend, he added.

“We don’t like to see load shedding on Christmas Day,” Guerrero said.

Before Gov. Juan N. Babauta lifted the emergency declaration placing CUC under his control, his administration committed $4 million in subsidy to the CUC to ensure stable fuel supply until Jan. 8, according to Guerrero.

Guerrero said Finance Secretary Fermin Atalig released a $700,000-check to the CUC yesterday as part of the administration’s committed funds for CUC’s fuel supply.

Guerrero said additional money would be put up by CUC, expecting Mobil to deliver to Saipan on Friday fuel supply that will last for the next 22 days.

With or without the additional money, Guerrero remained hopeful that Mobil would continue with its fuel delivery to prevent any power load shedding during the holidays. He said Mobil recently delivered fuel to Rota even without getting paid first.

The CUC board was supposed to meet yesterday, but the meeting did not push through due to lack of quorum. When the governor announced the lifting of his emergency declaration last week, Guerrero said he would immediately call for a board meeting possibly on Wednesday this week not only to formally adjourn the suspended May 19, 2005 meeting but also to discuss about the CNMI’s power crisis.

Guerrero said the incoming administration of Gov.-elect Benigno Fitial should think about placing the CUC under an emergency declaration again or look for other ways to subsidize power generation, or the CNMI faces power load shedding and rate adjustments.

With the average monthly fuel cost hovering around $6.2 million, Guerrero said the central government needs to subsidize fuel cost by close to $2 million monthly. He said the average monthly collection from customers has reached only over $4 million.

Guerrero added that the implementation of the fuel surcharge has also alleviated the CUC’s financial condition, generating some $1.4 million monthly.

Guerrero also said that the CUC’s power rate structure should be studied, saying that it has been in effect since 1989. The CUC pegs residential and commercial rates at 11 cents and 16 cents, respectively, for every kilowatt-hour consumed. On Guam and in Palau, residential rates reach 21 cents and 22 cents, respectively, he added.