CUC board delays action on IRP

Majority sided with San Nicolas’ motion to return to negotiating table with Mobil

The majority of the Commonwealth Utilities Corp. board of directors opted to delay their decision on its Integrated Resource Plan during their special board meeting last Saturday. The board instead wanted to renegotiate their $371 million contract with Mobil. (Frauleine Villanueva-Dizon)

The majority of the Commonwealth Utilities Corp. board of directors has opted to delay its decision on the company’s Integrated Resource Plan that has been in the works since 2014—leaving CUC without a plan to present to the Commonwealth Public Utilities Commission on April regarding their resource plan.

During their special meeting on Saturday, prior to discussion in executive session, CUC legal counsel James Sirok reminded the board to finalize the IRP.

“We have to finalize the IRP today so we can get that taken care of,” Sirok said.

CUC has been developing the IRP with their consultant—Leidos Engineering LLC whom they paid $495,000 for its services—to choose feasible, cost-effective, and reliable resources for their power generation.

Coming out after more than one hour of closed-door discussion, director David Sablan immediately made a motion for the board to approve Case No. 12 in the presentation provided them, which will include “10-megawatts of photovoltaic power and pursuing light fuel oil diesel engines that can be converted to liquefied natural gas.”

“I would motion that we approve that as a priority process in the IRP and so that will allow our engineers to work on that as a priority,” Sablan said.

Nobody from the board wanted to second Sablan’s motion, but after Sablan said that someone just second the motion so that they could vote on it, Torres did.

However, the majority of the board did not want to take action on the IRP even as CUC’s almost 40-year-old power infrastructure is continuing to depreciate as days go by.

Currently, CUC’s assets are more than 70 percent depreciated.

“I am under the impression that we don’t have to approve the IRP at this point,” vice chair Eric San Nicolas said.

San Nicolas argued that there are “other avenues” to address the power plant issue, which he would later on make a motion on.

Sablan disagreed with San Nicolas’ opinion, saying that if they are to take a different route, “Why did we have Leidos do this all then for the past year plus?”

“What vice chair San Nicolas is suggesting that we just put that off to the side and do something different,” Sablan said.

“There are bidders that are waiting for a decision on our part on whether they are going to get an award, and so that they can move forward. The engineers are waiting for some direction from us, we need to give it to them,” he added.

Sablan argued that Leidos is smarter than the board with regards to power generation and should therefore consider their recommendations.

However, Sablan’s motion failed after San Nicolas, Albert Taitano, and Joe Torres voted no and chair Adelina Roberto and Ignacio Perez abstained.

Renegotiate with Mobil
San Nicolas then made a motion to direct management and the legal counsel to “invite Mobil back to the negotiation table to potentially re-negotiate a potential change order on the $371-million contract that was signed in March 2014.”

“To see if we can negotiate the length of the contract, the amount of the contract possibly reduction to compensate or incorporate anywhere from $10 million to $30 million to purchase generators for the power plant so that it is included within the $371 million,” San Nicolas said.

This was opposed by Sablan.

“We’re mixing generators and oil here. It just doesn’t make sense to go back to Mobil to ask them to consider a reduction or something. I don’t know what it is that vice chair San Nicolas is proposing but I’m telling you it’s convoluted. Secondly, what are we going to do with those bidders then that participated in the RFP and providing us resource for the Integrated Resource Plan? Are we going to tell them now to go fly a kite?” Sablan said.

“That is completely irresponsible. I must say that for the record,” he added.

Sablan noted that the bidders, that took part in their requests for proposals in November 2014, would have to be addressed.

However, Sirok commented that the RFP that was published under the IRP process “has already went through the process.”

To which Sablan responded, “Why are we discussing all these things in executive session then? The reason being that all those bids are still active, right Jim?”

Sirok did not provide an answer to this, but responded, “Well I think you have a good discussion but I think it’s, uh, we are in the middle of a discussion on the motion on a different subject and so let’s finish with this particular motion on Mobil.”

The majority of the board then proceeded to vote yes on San Nicolas’ motion.

‘Doesn’t seem important’
After the motion passed, Sablan commented to his colleagues, enumerating the many things that they need to address such as the amount of repairs that the power generation side has been needing and CUC’s low reserve capacity.

“There’s been a lot of things that I’ve been saying about what needs to be addressed in the utility and apparently it doesn’t seem to sink in,” Sablan said.

“These doesn’t seem to be important to you folks,” he added.

The comment made San Nicolas interrupt Sablan, saying that he is “out of line.”

Taitano also commented on Sablan, starting with “with all due respect,” but then proceeded to speak in Chamorro.

Roberto stopped what potentially could be a heated argument.

Asked what would happen to the IRP, Roberto said the matter is “tabled.”

“It’s just we haven’t decided yet. We need to address other issues first. We don’t even know what’s there other than what they presented to us,” Roberto said.

Frauleine S. Villanueva-Dizon | Reporter
Frauleine Michelle S. Villanueva was a broadcast news producer in the Philippines before moving to the CNMI to pursue becoming a print journalist. She is interested in weather and environmental reporting but is an all-around writer. She graduated cum laude from the University of Santo Tomas with a degree in Journalism and was a sportswriter in the student publication.

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