Blunt words, blunt message

Gov. Benigno R. Fitial had some strong words for the Legislature, which he blamed for the power crisis, in his State of the Commonwealth Address yesterday.

Fitial said the Commonwealth Utilities Corp. was on track to becoming self-sustaining “until the Legislature intervened.”

According to the governor, CUC cannot pay for the skyrocketing cost of fuel because of four CUC measures that the Legislature made law by overriding his vetoes. One particular piece of legislation that had affected CUC’s cash flow is Public Law 15-94, which substantially reduced the electric rates and charges for residential customers.

“I vetoed this legislation because I feared it would drive CUC into insolvency. As a result of these laws, CUC is presently operating at a deficiency of $1.2 million a month. It was unable to find money to pay for a full shipment of fuel in April. There are no funds available in the Commonwealth to subsidize CUC,” said the governor.

He added that since the new Legislature convened in January, the administration had asked it to repeal the power rates rollback. After much going back and forth, the repeal cleared the Legislature this week. The governor said he would sign the bill promptly.

Speaker Arnold I. Palacios, who authored the rollback legislation and eventually sponsored the bill to repeal it, said the Legislature “takes credit and blame for the bill,” which offered temporary relief to the customers at CUC’s expense.

Palacios said the governor was not free of fault either. He pointed out that the bill called for regulated power rates. But this was not done because the administration took long in appointing people to the Public Utilities Commission.

Senate President Pete P. Reyes also took offense at the governor’s comments. “The governor had over a year to submit names for PUC, but he didn’t do it until recently. Everybody should take blame for [CUC’s problems],” he said.

Last month, three PUC appointees were sworn into office, enough to provide a quorum and to get organized. Fitial said he would propose candidates for the two remaining positions in the near future.

The governor announced the nearing completion of maintenance and repair at Saipan’s main power plant. Thanks to a $6.5-million grant from the U.S. Interior Department’s Office of Insular Affairs, the power plant’s capacity will increase from 28.7 to 81.2 megawatts in six months.

“When this work is done, CUC will be able to produce electricity up to 90 percent of its capacity—an efficiency level not seen for many years,” he said.

He renewed his commitment to the privatization of CUC. But before CUC can be privatized, he said, the government needs to complete the rehabilitation of the power plant and draft a fair request for proposals.

The governor also reported that more than a dozen firms had expressed their interest in submitting proposals for alternative energy sources. The deadline for submission of proposals is May 16, 2008.

Fitial offered an upbeat assessment of the economy, citing foreign investments, new flight service, the planned military buildup on Guam, and expedited drawdown of federal funds for capital improvement projects.

He also said the CNMI’s share about $16.1-million share of the federal economic stimulus package should increase government revenue. But this will not be enough to offset the government’s projected shortfall for the current fiscal year.

To avoid deficit spending, cost cutting measures will continue, he said.

The governor’s speech also touched on federal issues such as minimum wage hikes and immigration federalization. He reiterated his call for Congress to offset the impact of the wage hikes with a $15-million financial aid. As for federalization, he said he “will not make any final decision on the commonwealth’s response until the legislative process is finished.”