House lawmakers heard from local utilities company officials on power and water issues during a hearing on Capitol Hill yesterday and widely criticized their plans for a reverse-osmosis system.<\/p>\n
Some lawmakers challenged the Commonwealth Utilities Corp.\u2019s priorities, pointing to the utilities company\u2019s 70 percent in unaccounted for water and while some board members touted the RO treatment plans, the board also cautioned the plans were still being debated.<\/p>\n
Nevertheless, the $160 million to construct the RO plant, funding for which would be financed through taking on debt, was still challenged.<\/p>\n
\u201cYou\u2019re saying there is one magic bullet. I beg to differ,\u201d said House vice speaker Joseph Deleon Guerrero (Ind-Saipan), responding to CUC board member Ignacio Perez after he touted the RO plans. \u201cThe problem with RO is that no matter how cheap it is we are going to be charged per gallon and those are going to be charged to our customers.<\/p>\n
\u201cSo consider other options,\u201d the vice speaker added, \u201cbefore you decide to go with one magic bullet.\u201d<\/p>\n
Guerrero said over the years, the House has had all kinds of experts come up with all kinds of solutions to them. He noted an early Army Corps of Engineer study done several years ago that proposed over 20 recommendations on how the CNMI could address the water issue, with some being very costly and some practical, <\/p>\n
He noted the RO plan was in the report. \u201cI don\u2019t think it is ranked high up there. I do believe we need to fix our leaks. We can\u2019t supplement our water, then lose it,\u201d especially with the RO system where customers would be paying per gallon.<\/p>\n
Guerrero wanted to know if CUC was systemically approaching water leak issues.<\/p>\n
CUC chief engineer for water and wastewater John Riegel said Saipan\u2019s system was complicated, with its changes in topography from Beach Road to Mt. Tapoachau. And said CUC has approached leaks tank service area to tank service area, starting with an area that shows a great amount of leakage, from higher leaks to lower.<\/p>\n
They started at Dandan, according to Riegel, and the San Vicente and will then move down to Koblerville, As Matuis, then Garapan. But he also stressed the only money we get to put into the effort is \u201cfrom a couple of small EPA grants.\u201d<\/p>\n
\u201cYes. We are systematically approaching it,\u201d Riegel said, responding to the vice speaker. \u201cWe do have a game plan.\u201d He also said they would be able to \u201cquantify\u201d whether losses came from leakage, theft, or unaccounted for water to rectify water billings.<\/p>\n
Rep. Edwin K. Propst (Ind-Saipan) also shared the vice speaker\u2019s sentiments on \u201chaving priorities.\u201d \u201cWhen we heard about this RO system, there was a lot of questions and there continues to be a lot of questions,\u201d Propst said.<\/p>\n
\u201cIs the RO system the answer to our prayers and it will solve all our problems with regards to water?\u201d he added, going on to relay constituents\u2019 complaints about why there were only three hours of water a day where they lived or why was their \u201cwater trickling?\u201d<\/p>\n
Propst believes the question is what is \u201cthe greater problem\u201d is it with, production or distribution? \u201cWhere is our focus?\u201d he said. At costs of $160 million to produce more water, he said he was \u201cdeeply concerned\u201d they could talk about financing when CUC recently fired without cause its chief financial officer.<\/p>\n
\u201cThat is scary,\u201d he said, and in terms of court stipulated orders, he noted that CUC faces fines up to $56 million.<\/p>\n
\u201c$56 million in fines and we just recently fired our CFO and we are talking about RO system,\u201d he said, going on to note vacant top utility management positions, like the executive director positions, among others, for which CUC faces fines up to $5,000 a day.<\/p>\n
\u201cWe are moving on with RO plan when there are far greater priorities…We are operating at a 70-percent loss everyday,\u201d he said, noting concern that the project would cost $160 million and amortized after 25 or 30 years would \u201cballoon\u201d to over $300 million.<\/p>\n
\u201cUnfortunately there is no CFO right now. It is most crucial to have a chief financial officer to answer the questions that we will pose about this RO system.\u201d<\/p>\n
Propst also warned against any sole-source contracts that could be awarded for this project.<\/p>\n
Responding to Propst, CUC board director Eric San Nicolas said there was \u201cno hidden agenda\u201d and that they inherited issues longstanding for 25 years.<\/p>\n
\u201cI do not support anything that will raise rates,\u201d he said.<\/p>\n
Noting the $26 million the central government owes CUC, San Nicolas said, \u201cI challenge every congressman to draft an appropriation to address that consistently on a monthly basis.\u201d <\/p>\n
He said the board is entertaining \u201creal incremental solutions because we don\u2019t have all the finances\u201d and that an RO system was possibly one of them but \u201cwe haven\u2019t made a decision…we continue to debate.\u201d<\/p>\n
\u201cWe have so many backlash from the media,\u201d San Nicolas said, going on to complain that a CUC fuel contract signed with Mobil Oil Marianas several years was \u201cnever controversial\u201d and \u201cit went through.\u201d<\/p>\n
\u201cTake those two and compare. The $370 million was never controversial, it went through, and yet a potential that hasn\u2019t even been entertained by the board\u201d has been, he said. <\/p>\n
He pleaded lawmakers to address the government\u2019s debt to CUC.<\/p>\n
During his presentation, CUC acting executive director Gary Camacho made a Power Point presentation on, among others, CUC\u2019s water distribution issues. <\/p>\n
A \u201cpossible solution?\u201d A 6-million gallon RO to meet current and future water needs, according to his report. <\/p>\n
The system would meet U.S. Environmental Protection Agency standards and would be located at Lower Base adjacent to CUC\u2019s Power Plant 1, the report said. CUC deems this the best location due to its close proximity to water wells, brine injection wells, and existing fuel storage facilities.<\/p>\n
The plant would be housed in a concrete structure designed to withstand 175 miles per hour wind load and would include full power from rebuilt generators from Power Plant II, Camacho\u2019s report said.<\/p>\n
An existing 9-million gallon below grade tank at Sadog Tasi would also be rehabilitated for storage and the RO plant could be expanded at any time to 9 million gallons to meet future demands.<\/p>\n
CUC proposes to enter into a private public partnership. Financing the project through issuance of certificates of participation issued by public partner at an anticipated interest rate of 5 to 7 percent.<\/p>\n
Debt would be capitalized for three years and principal deferred for another two years, the CUC report said.<\/p>\n
This means CUC plans to make no payments until the beginning of the third year of RO operation. <\/p>\n
CUC said the three years would allow system improvements, needed rate adjustments, and improved cash flows before payments begin.<\/p>\n","protected":false},"excerpt":{"rendered":"
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