OGM’s Cabrera questions CUC’s plan to enter agreement with IPP in 2025

Office of Grants Management clearinghouse administrator Epiphanio E. Cabrera Jr. questioned last Thursday the Commonwealth Utilities Corp. apparent plan to hammer out an agreement with an independent power producer in 2025.

Speaking before the Senate Fiscal Affairs Committee’s hearing on the 2024 budget for OGM, Cabrera said he was giving CUC a heads-up when he disclosed during a recent CUC board meeting that the CNMI is about to receive a $25-million grant from the U.S. Environmental Protection Agency for the installation of solar panels on rooftops of homes.

“Because if you think about it, they’re trying to [have an] independent power producer agreement in 2025. But why would you have a big company come in if you already have all the solar [panels] on top of residential homes?” Cabrera asked.

Epiphanio E. Cabrera Jr.

He reiterated that once the CNMI gets that $25 million, that will have a big financial impact on CUC in the next year or two.

Sen. Celina R. Babauta (D-Saipan) asked Cabrera if he has a name of that independent power producer, but Cabrera advised Babauta to ask CUC instead.

“Because I’m hearing a name. But I’m concerned about that name actually,” Babauta said.

Gov. Arnold I. Palacios had proposed a $1 budget for OGM in Fiscal Year 2024. OGM normally does not submit a proposed budget as it operates using its indirect costs.

Fiscal Affairs Committee chair Sen. Donald M. Manglona (Ind-Rota) said at the start of the hearing that they want to understand where the CNMI is in terms of how much federal funds have been received.

Cabrera disclosed that on average the CNMI government receives between $3.2 million and $3.6 million in indirect cost collections.

However, when COVID-19 occurred, that situation caused a slowdown in growth because government employees were not able to come to work and spend the money, Cabrera said. He pointed out that indirect cost only works when the grant is being spent.

“If the grant is not expended, we don’t collect. There is a misconception that indirect cost is you get a grant and right then and there you take it. No,” the administrator said.

He said they don’t collect indirect costs on benefits like food stamps, or giving free food, any health benefits or childcare.

Cabrera said last year, the indirect costs collection was $2,026,341.