Gov. Benigno R. Fitial said yesterday he suspended the procurement regulations through his recent declaration of a state of disaster emergency for the CNMI in order to ensure that the Commonwealth Utilities Corp. could get the electric power flowing quickly and avoid any explosions at CUC\u2019s power plants in Lower Base.<\/p>\n
In clarifying the emergency declaration, Fitial at the same time blamed the Public Utilities Commission for creating the power crisis with its interpretation of the words \u201cpublic utility\u201d and its demand for a halt in the temporary power deal with Aggreko International.<\/p>\n
\u201cPUC is not CUC management. It was never intended to be. And it certainly does not have the resources and expertise to manage a utility company,\u201d said the governor in his letter to Senate President Pete P. Reyes and House Speaker Arnold I. Palacios.<\/p>\n
Fitial wrote the letter in response to the two lawmakers\u2019 request for the governor to clarify the state of disaster emergency declaration he issued Aug. 1, 2008.<\/p>\n
Reyes and Palacios specifically asked for clarification on the nature of the emergency declaration and the justification for, intent and extent of application of the declaration\u2019s Directive No. 2.<\/p>\n
Directive No. 2 states that \u201cthe Commonwealth PUC Act of 2006, Public Law 15-35\u2026is hereby suspended insofar as it would require the presentation of CUC procurement information, including contracts and other measures relating to the supply of power or the operation and maintenance of CUC\u2019s generation, for PUC review.\u201d<\/p>\n
In his response yesterday, Fitial said the disaster declaration, and the directives that implement it, are focused on bringing CUC and the island\u2019s community life \u201cback to health.\u201d<\/p>\n
On the Directive 2 issue, the governor said his purpose is to have \u201cno more potentially deadly delay based on legalistic interpretations of the PUC Act.\u201d He said the PUC Act does not require PUC pre-review of contracts.<\/p>\n
But in PUC\u2019s July 29 letter, Fitial said, the commission insisted that PUC essentially substitute itself for CUC management, and review all contracts in advance.<\/p>\n
\u201cIf [CUC executive director] Tony Mu\u00f1a is to solve our power crisis, we must not tie his hands with time-consuming, unnecessary bureaucratic pre-reviews,\u201d he said.<\/p>\n
Fitial said the language of his directive makes clear that PUC is to focus on its main job\u2014rates, charges and the cost of serving the citizens\u2014and not on trying to run a utility company.<\/p>\n
The governor emphasized that PUC can examine contracts at the proper time.<\/p>\n
Citing background of the daily outages, Fitial recalled that the worsening power crisis on Saipan started three weeks ago.<\/p>\n
Fitial said CUC power plant engineers had advised Mu\u00f1a to shut down Power Plant I before one of the power engines blew up.<\/p>\n
\u201cPart of the plant was already down, so we were experiencing daily blackouts,\u201d he said.<\/p>\n
The governor said Mu\u00f1a moved quickly to hire \u201cworld-class European company, Aggreko,\u201d to provide temporary power to Saipan with no change in the electric power rates.<\/p>\n
Fitial said CUC had previously done a public Requests For Proposals solicitation as the procurement regulations require. The previous leadership had, however, not acted on the open solicitation, he said.<\/p>\n
\u201cMeanwhile our electricity generators continued to fail, piece by piece,\u201d he pointed out.<\/p>\n
The chief executive said the Aggreko deal was the right one to get CUC through the massive repairs that would take Power Plant 1 off line.<\/p>\n
However, he said, PUC wrote CUC last July 29, demanding that they review the Aggreko deal and decide if an independent company like Aggreko could do business in the Commonwealth.<\/p>\n
Fitial said PUC insisted that Aggreko was going to be a \u201cpublic utility,\u201d and would need to go through the lengthy process of getting a special utility certificate from them and a pre-contract review process.<\/p>\n
\u201cBut the PUC has no staff, and no experience yet in such matters. It was pretty clear that Tony Mu\u00f1a\u2019s efforts were going to fail, along with Power Plant 1,\u201d he said.<\/p>\n
The governor said he understands the PUC Act provides that monopolies for power, water and wastewater treatment are regulated.<\/p>\n
This means, he said that CUC\u2019s rates, charges and treatment of customers are to be reviewed by PUC similar to the law in 50 states.<\/p>\n
Fitial, however, stressed that PUC does not pre-approve CUC\u2019s work and that the Commission is not a board of directors. Once CUC fixes the temporary power problem, PUC can review the contracts to see if there is any effect on rates.<\/p>\n
\u201cBut if there is no effect, no PUC action will be needed,\u201d said Fitial, adding that such is the way things work everywhere else in the U.S.<\/p>\n
Fitial said PUC caused the crisis because it took an overly literal view of some statutory language that seems to say that anything is a \u201cpublic utility\u201d which sells a \u201csystem\u201d or a \u201cfacility\u201d to the CUC.<\/p>\n
PUC, he said, also demanded that it review all contracts before they are signed, even if there is no effect on rates.<\/p>\n
Fitial expressed appreciation to the Legislature for its quick action that, according to the governor, helped forestall the crisis.<\/p>\n
\u201cYou drew up a statute to exempt this temporary power deal from the PUC\u2019s reading of the term \u2018public utility\u2019. It specifically required me to declare a disaster emergency before the definition would work,\u201d the governor said.<\/p>\n
Fitial compared CUC and CNMI\u2019s economy to a very ill person that has been rushed by an overworked team to the hospital for emergency heart surgery.<\/p>\n
And he compared PUC to an outside new committee that has just been learning how to use a scalpel.<\/p>\n
\u201cIn a short time, we hope to see our patient well. We cannot stop the surgery while an outside committee, new on the job, learns which scalpel to use. We should not,\u201d Fitial said.<\/p>\n","protected":false},"excerpt":{"rendered":"
Gov. Benigno R. Fitial said yesterday he suspended the procurement regulations through his recent declaration of a state of disaster emergency for the CNMI in order to ensure that the Commonwealth Utilities Corp. could get the electric power flowing quickly and avoid any explosions at CUC\u2019s power plants in Lower Base.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-125626","post","type-post","status-publish","format-standard","hentry","category-local-news"],"_links":{"self":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts\/125626","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/comments?post=125626"}],"version-history":[{"count":0,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/posts\/125626\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/media?parent=125626"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/categories?post=125626"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.saipantribune.com\/index.php\/wp-json\/wp\/v2\/tags?post=125626"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}