The Commonwealth Utilities Corp. has set Feb. 23 as the closing date for a request of proposal to create an integrated resource management plan for the utility firm.
An integrated resource plan’s purpose is to determine the best combination of both base load and renewable energy sources capable of providing reliable power at the lowest price to consumers.
The integrated resource plan, funded by a grant from the U.S. Department of the Interior’s Office of Insular Affairs, is eyed as one of the ways for the CUC to bail itself out of its financial woes and at the same time lower utility costs in the Commonwealth.
The RFP is designed so that CUC gains full understanding of feasible options, operating characteristics and system impacts, and costs. The proposals will be evaluated by Leidos Engineering LLC.
The utility firm is seeking all economically and technically feasible power supply options, including traditional fossil-fueled resources as well as renewable energy project.
In a closed-door meeting with Lt. Gov. Ralph DLG. Torres on Capital Hill last Feb. 6, CUC officials reiterated the utility firm’s financial difficulties.
Torres said his office will work with CUC to help the utility company address its financial woes.
CUC reported that issues such as volatility of prices, the servicing of disconnected island communities, declining power generation and distribution due to a lack of reinvestment over time, and years of poor financial performance, due mostly to rates that have not recovered the cost of service, continue to hamper the utility group.
Torres said the years of poor financial planning will require CUC to “find a balance between achieving the lowest possible rates for the many families and businesses in the CNMI and providing the necessary resources to keep CUC viable and operational in the long term.”
The official said he supports the creation of the integrated resource management plan.
Dan V. Jackson, a representative of economists.com, the rate consultant of CUC, disclosed that the utility agency incurred about $80 million in operating losses since 2006.
Jackson warned that CUC might have one year left if it continues to struggle financially and that the No. 1 reason for CUC’s financial woes is the non-payment of the government’s past arrears.
Jackson said that government receivables have been increasing since 2013. In October 2013, government arrears stood at $20.39 million. It rose in March 2014 to $26.16 million. It rose further to $27.06 million in October 2014, and, as of February this year, it is now at a whopping $28.74 million.