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Govt favors turning CUC debt into rebate
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Posted on Dec 10 2006
The Fitial administration is still mulling a proposed legislation to require a private company taking over Saipan’s main power plants to repay half the Commonwealth Utilities Corporation’s debt by rebating it out to customers.
Press Secretary Charles P. Reyes Jr. said that Senate Bill 15-62, which was passed by the Legislature on Nov. 30, 2006, is still under review.
The administration backed the bill’s original version, which sought to free CUC’s future independent power producer from the obligation to pay half of CUC’s $45.5-million debt to Commonwealth Development Authority.
But the bill went through numerous amendments in the Legislature. The version that now awaits the governor’s signature seeks to mandate the IPP to rebate back the $22.75 million to residential power customers, rather than require a repayment of the debt. The rebate could be in the form of a fixed dollar amount discount or credit on a consumer account. It would be subject to review and approval by the Public Utilities Commission.
“We need to assess the viability of that proposal. We have to see whether it is most beneficial plan in the long term—if this is a reasonable compromise,” Reyes said.
When Public Law 15-12 was passed to write off CUC’s debt, the Legislature included a provision to require an IPP taking over the power plants to pay half of the $45.5-million loan principal to CDA. The payment from the IPP was intended for CDA’s loan programs.
Although the administration approved the legislation, it immediately pushed to repeal the repayment
Villagomez said the payment requirement should be written off, as the IPP might pass this cost on to the consumers. “The point of the privatization is to keep costs down. We’re not doing this to see the cost of utility service go sky high,” he said.
