Monday, August 18, 2008

Fitial Declares Emergency over CUC

Lawmakers: Emergency declaration ‘disturbing’
Monday, 18 August 2008 00:00 By Gemma Q. Casas - Variety News Staff

GOVERNOR Benigno R. Fitial’s latest state of emergency declaration involving the Commonwealth Utilities Corp is “disturbing” and “troublesome,” according to some lawmakers.

But Press Secretary Charles P. Reyes Jr. said Executive Order 2008-10, or the State of Emergency Declaration for the CNMI, was necessary “to provide the governor with the legal means to address our pressing power crisis.”

The EO, which will expire on Sept. 1, suspends CUC’s procurement regulations within a 30-day period, subject to further extension. This means that CUC can award contracts without going through the bidding process.

The EO also suspends the procurement regulations of the law that created the Public Utilities Commission in 2006 in relation to supply of power or the operation and maintenance of CUC’s generators.

The EO empowers CUC, which is under the governor’s control, “to execute the wholesale generation power contract it has negotiated with an independent power producer for a period of two years.”

“By this disaster declaration, I intend to enable CUC, within the definitions of Public Law 16-9, to sign a power contract with the appropriate person,” the governor stated in his four-page EO signed on Aug. 1 that was made public only last week.

Reyes said he understands that the independent power producer referred to was the U.K.-based Aggreko International Power Projects Ltd., whose 15-megawatt generators will be leased by CUC for at least a year for $504,000 a month, excluding fuel and maintenance crew.

The generators are scheduled to arrive here in early September from Singapore.

“I understand the EO was made in connection with the Aggreko generators. The EO was also made in consultation with the legislative leadership,” Reyes told Variety.

The administration promised to keep lawmakers informed about its plans to solve the power crisis on Saipan.

“The administration understands the skepticism of some members of the Legislature, but they should be assured that the EO was necessary and will be used responsibly to resolve our power crisis next month. We will keep the legislative leadership informed of CUC issues and developments,” said Reyes.

“We rely on the legislative leadership to communicate our plans and issues to all members, as a matter of protocol,” he added.

Rep. Tina Sablan, Ind.-Saipan, noted that the governor’s latest EO will pave the way for a sole-sourced privatization contract with CUC.

According to Rep. Diego T. Benavente, R-Saipan, “Several of us are trying to read between the lines as to what it is that the governor is trying to accomplish in the state of emergency, really, if it’s just to expedite the repair of Power Plant 1. But sole-sourcing — we worry about that particular language.”

Benavente earlier expressed concern that the worsening power situation on Saipan was deliberately neglected so that the administration could justify sole-source contracts for CUC.

He said the latest EO seems to validate his “conspiracy theory.”

“There are a lot of questionable process in the repairs of power plants 1 and 2,” Benavente said. “We need to be concerned about what’s happening now because it’s getting too much for us, especially with the coming opening of schools. But this is a justified state of emergency if in fact it is only for the purpose of rehabilitating the power plants.”

Rep. Stanley Torres, R-Saipan, said lawmakers weren’t informed about the executive order.

“It’s very disturbing that the governor is not sharing his plan with the Legislature,” he said. “Everybody knows we have a problem here. I think the Legislature needs to be updated too. Even PUC is not functional anymore. My reading is that the governor is taking everything back under his wing.”

Speaker Arnold I. Palacios, R-Saipan, said the House legal counsel is preparing a legal opinion about the EO.

He said as far as he knows, the EO aims to secure the deal with Aggreko.

“I’m trying to see if it goes further and beyond the requirement of Public Law 16-9,” he added.

The House is scheduled to hold a session this afternoon.

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