By Gemma Q. Casas
Variety News Staff

THE bill mandating the Commonwealth Development Authority to fully waive the repayment of the Commonwealth Utilities Corp.’s $45.5 million debt to the government’s financial and lending institution was signed into law last month.
Gov. Benigno R. Fitial signed on Jan. 23 Senate Bill 15-62, which is now Public Law 15-44.
It is an act to amend section 2 of Public Law 15-12 “to further the rehabilitation and reorganization of CUC.”
The bill, authored by Senate President Joseph M. Mendiola, Covenant-Tinian, requires the winning bidder in CUC’s privatization project to pay half of the agency’s $45.5 million debt — or $22.75 million — which will be rebated to residential power consumers.
P.L. 15-12 waived CUC’s principal debt to CDA, but a clause mandates that the winning independent power producer pay CDA.
Lawmakers later drafted a new bill to eliminate this provision —S.B. 15-62.
According to Mendiola, the original language of P.L. 15-12 requiring the independent power producer to repay CDA $45.5 million “not only impedes the likelihood of privatization of (CUC) but also heightens the risk that the cost to the independent power producer who takes control of CNMI’s power generation system might be borne ultimately by commonwealth consumers.”
According to the newly signed P.L. 15-44, the yet to be formally formed Public Utilities Commission will determine how the $22.75 million will be rebated to consumers.
CUC doubled its power rates starting in July 2006.
“The said rebate shall be subject to review and approval by the Public Utilities Commission upon privatization,” P.L. 15-44 stated.
P.L. 15-12 contained the following provision: “In the event that the power generation system for the CNMI is privatized and controlled by an independent power producer, 50 percent of the principal amount of $45.5 million shall be paid by the independent power producer to the Commonwealth Development Authority.”
This was deleted by S.B. 15-62 and replaced by the following: “However, in the event that CUC’s power division or any section thereof is privatized, 50 percent or $22.75 million of the principal amount of $45.5 million shall be rebated to residential power consumers and the remaining 50 percent shall be waived.”
The lawmakers want the rebate be in the form of a fixed dollar amount discount or credit on a consumer account.
Last week, CUC issued a request for proposals for the privatization of its power plants in Saipan through a 25-year franchise agreement.
Under this agreement, the government-owned electric utility will be sold to a private buyer which will in turn sell electricity to the public.
CUC said the winning bidder should be able to reduce the high electric rates in the CNMI.