By Gemma Q. Casas
Variety News Staff

THE former chairman of the defunct Commonwealth Utilities Corp. board of directors says the public may have to pay higher electric rates once the administration privatizes Saipan’s power plants.
Francisco Guerrero, an engineer and currently a member of the CNMI Board of Professional Licensing, said the previous privatization plan would only transfer the production of electricity to an independent power producer but not the transmission and distribution functions of the power plants.
He said there may be extra costs associated with transferring transmission and distribution to the winning independent power producer, or IPP.
“It’s going to increase our rates,” said Guerrero.
He said the IPP will recover its investment through the fluctuating power rates.
The prequalification bid for private firms seeking to participate in CUC’s privatization project was supposed to end March 12.
CUC, however, extended it through April 2 and then to April 17.
“A pre-qualification proposal must be received no later than April 4, 2007, midnight, Saipan local time, by electronic filing (e-filing) and be followed up via hand-delivery or courier. An original and 7 copies of the e-filed pre-qualification proposal must be received by CUC no later than April 17, 2007 by 4:30 p.m. Saipan local time. No material variation from the e-filed version shall be permitted,” CUC’s addendum no. 2 on the original invitation for bid stated.
CUC believes privatization is the only solution to solve the island’s power crisis since it does not have the capital needed to refurbish its power engines.
The U.S Department of the Interior recently awarded the CNMI more than $800,000 in grants to renovate CUC’s power plants.
CUC scrapped the old power rate of 11 cents per kilowatt hour for residential customers and 16 cents per kwh for both the government and commercial consumers and the 3.5 cent across-the-board fuel surcharge in July 2006 in favor of a new formula.