CUC needs further govt subsidy to buy $2M fuel

The Commonwealth Utilities Corp. needs a new $2-million subsidy from the CNMI government for the purchase of additional fuel to sustain the islands’ power generation.

According to acting CUC executive director Tony Guerrero, fuel supply at its power plants would only sustain power generation until today.

Guerrero said he would meet with administration officials today to discuss the matter. He said Mobil’s fuel tanker would arrive on Saipan from Singapore on Wednesday.

“We’re expecting $2 million out of the administration…[to] cover full tanker payment,” Guerrero said.

Yesterday, he said the extent of government assistance remains uncertain, except for the administration’s broad commitment to assist the cash-strapped utility firm.

Days before Christmas Day, the government assured that it would give CUC $1 million in fuel cost subsidy this week, besides committing a total of $1.5 million in the last two weeks.

The government gave the CUC a total of $1 million in two installments before Christmas Day, ending the two-day emergency power load shedding on Saipan after Dec. 21. The subsidy, which included an additional $500,000 last week, averted rolling blackouts from happening during the holiday season.

The CUC has been suffering from a cash flow problem, despite its average monthly collection of $6 million. The monthly collections include fuel surcharge on top of the cost of customers’ power consumption.

CUC’s power generation for Saipan, Tinian and Rota costs approximately $179,000 daily. On Saipan, CUC’s two operational power plants consume an average of 84,000 gallons at a cost of $1.75 per gallon, resulting in a daily consumption of $147,000.

Tinian’s daily fuel consumption averages 12,000 gallons, while that on Rota reaches 4,000 gallons. At the rate of $2 per gallon, the CUC’s daily fuel consumption for the two islands’ power plants costs $32,000.

Meanwhile, Guerrero said the CUC has not begun shutting off existing streetlights despite an earlier CUC public announcement about the problem, saying that such a move requires the approval of the utility’s board before it can be implemented.

However, he said CUC could not act on requests for the installation of new streetlights, especially on secondary or tertiary roads. “Our main concern is the main roads.”

In a public announcement released to media offices on Dec. 28, the CUC said it could not just install streetlights, but had also begun shutting down streetlights on many parts on Saipan to conserve fuel.

The CUC had said that streetlights that are not on primary roads such as Beach Road and Middle Road were being shut down, while the beleaguered utility firm continued to scramble for government subsidy to purchase fuel to sustain power generation during the holidays.

It even noted in the public announcement the many inquiries about the streetlight problem by several establishments, including government agencies, churches and private homeowners.

“Unfortunately, CUC’s worsening financial situation does not allow us to provide additional services. In fact, CUC has been forced to shut down streetlights that are not on primary roads in order to conserve fuel,” the CUC’s Dec. 28 public announcement stated.