Muna asks Interior for $19.694M

The Commonwealth Utilities Corp. needs $19.7 million for this year until 2010 for the operation and completion of its projects, mostly for the repair and upgrading of its power engines.

CUC executive director Antonio Muna told Saipan Tribune yesterday that this was one of the topics they discussed with the visiting Office of Insular Affairs officials on Tuesday at the Governor’s conference room.

He explained that of the $19.694 million they are asking for, only $1.2 million—representing the balance of the $6.5 million federal funds that have already been given—is currently available.

That $1.2 million, he said, is needed to buy power engine parts, for professional power generation management (technical assistance), and supervision of ongoing contracts.

CUC recently requested $3.894 million from OIA to buy parts and equipment required to support the contract with DCM that will bring down CUC’s share and allow it to purchase parts for at least two power engines. Muna said the request for $3.894 million has been made and OIA continues to consider it.

“Hopefully they will respond positively to our request. If not then of course we have to source funding elsewhere in order to continue dealing with DCM,” said Muna during yesterday’s press briefing.

CUC’s contract with DCM is $5.1 million, which the utility agency has to pay out of its revenues.

The CUC report also mentioned $200,000 that is needed for technical assistance for power, water, and wastewater rate filing, representation, and public hearing.

Another $1.4 million will be allocated to buy additional parts required to support the balance of the rehabilitation of the power engines.

Some $1.2 million will be used to expedite the integration of renewable energy, upgrade the interconnection of facilities and incorporate net metering.

CUC also needs $4.3 million for its oil master plan, which includes rehabilitation of tanks, piping, incinerator and bring the power generation into compliance with U.S. Environmental Protection Agency orders with proper response equipment.

Muna said $7.5 million would fund the conversion of engines to heavy fuel oil, including the conduct of an air emission study, tank fuel handling, exhaust stack rehabilitation, and auxiliary improvement for four power engines.

“We’re looking at converting four of the engines from diesel to heavy fuel oil,” Muna said.

He conceded that the OIA officials did not advice CUC whether there was going to be additional money coming in since the discussion was more of a status report of where CUC is right now.

He said they addressed four points: the status of CUC power generation at present, current power rate and increasing fuel rates, road to recovery, and funding of capital improvement needs and technical assistance.

Under the road to recovery plan, Muna said they sketched out how CUC is going to move forward with meeting the power demand and other items in the next year or so.

Under the funding of capital improvement needs and technical assistance, Muna said they gave a status report on how CUC spent the $6.5 million that OIA gave CUC in the fall of last year. “How much of that money has been spent and essentially what else do we need in going forward to finance this road to recovery,” he said.

With respect to road to recovery topic, Muna said they addressed four issues: meeting demand, delivering reliable power at the least amount of cost, achieving financial stability, and training.

“We essentially outlined four tasks that CUC needs to venture on in order to realize a turnaround in its fortunes with respect to delivering reliable power and at the same time achieving financial stability,” he said.