CUC application doesn’t add up

One of the grant applications the CNMI is planning to submit in hopes of receiving $36 million in federal stimulus grant money for new power generators on Saipan seem to contain several inconsistencies.

The application, which was posted on the Department of Commerce Web site last week, states that an independent board of directors has legal and fiduciary duty to protect the interests of the Commonwealth Utilities Corp.

But CUC has been without a board of directors for months after Gov. Benigno Fitial placed the utility company under a state of disaster emergency, suspending several laws, including PL 16-17 that mandates the creation of a board composed of eight members.

The grant application also states that CUC and the CNMI are complying with Public Law 15-87, which mandates that certain percentages of power come from a renewable energy source. CUC did not meet the 10 percent alternative energy requirement by the December 2008 deadline. Moreover, CUC was granted a waiver on the requirements for the time being. The application says the CNMI is actively drilling to measure geothermal energy, and has had positive results so far.

CUC does not have a board of directors because the utility agency is still under a state of emergency, said Charles Reyes, press secretary for the Governor’s Office.

“Right now we are still in an emergency situation,” he added.

CUC executive director Antonio Muna could not be reached for comment yesterday.

The issue would need to be brought up with the grant writers, Reyes said.

“The grant writers may have gone by the formal writing and not have factored in the state of emergency,” he said. “We’ll have to go back and check with the grant writers.”

The press secretary said he would also need to check with Commerce Secretary Mike Ada, who is in Washington D.C., to learn more about the stimulus project funding process. Ada has been tasked with overseeing the CNMI’s effort for funding.

In regards to PL 15-87, Reyes said the law was very ambitious, even by United States standards.

“They are not all that realistic, to put it mildly,” Reyes said, but, he added, CUC and the CNMI are trying to comply.

“I think we’re attempting to comply. I think that’s one of the reasons for the state of emergency,” he said. “There’s still intent to comply, but I don’t think we’ve complied with the minimum requirements.”

“Given the situation with the financial crisis for the government and CUC, I don’t think we’re meeting that goal, but the goal is still there to reach,” he added.

CUC is one of the many local government agencies hoping to receive funding under the $787 billion stimulus law. The utility agency has several projects it is trying to fund using the federal money, but the CNMI must compete with other jurisdictions for any funds. The application in question is seeking $36 million to add three diesel generators, each providing seven megawatts of power for a total of 21 megawatts.

According to a project list, CUC is applying for the grant as part of the Title IV Department of Energy funds that will distribute $4.5 billion for electricity delivery and energy reliability.