By Gemma Q. Casas
Variety News Staff

THE ongoing dispute regarding the Commonwealth Utilities Corp.’s power rates may affect the agency’s ongoing efforts to privatize its power plants on Saipan.
CUC spokeswoman Pamela Mathis said because rates are a major factor considered by any private firm seeking to invest in the agency, the ongoing dispute over CUC’s electric rates will likely affect the privatization project.
“Any private company must be able to recover its investments and make a reasonable profit for its investors,” she said in an interview yesterday.
Saipan’s electricity comes from power plant 1, the main power source with 8 major engines and power plant 4 which has 10 small engines.
The Fitial administration adopted the new higher power rates starting in July 2006. They have three components —the fixed monthly customer charge, the variable fuel electric charge, and the non-variable non-fuel electric charge.
The electric fuel charge is based on how much CUC pays for its imported fuel from Singapore. This fluctuates and is set on the first day of each month.
CUC released a proposal last month inviting private companies to bid for the operation of the power plants on Saipan through a 25-year privatization franchise agreement.
This agreement will allow the winning bidder to take over the operation of CUC’s power plants on Saipan and then resell power to customers at a price based on the fluctuating formula.
CUC believes privatization will result in a more stable power supply on island and reduce the price of electricity as well.
The deadline for submission of proposals for the prequalification bid was set for March 12.
CUC will then narrow down the bidders who will be issued a certificate of prequalification which guarantees their eligibility to bid for the privatization project.
Jack Angello, a legislative consultant for Rep. Stanley T. Torres, Ind.-Saipan, said “it is interesting” that CUC ruled that its new and higher power rates are legal while the privatization project is ongoing.
He said there is no question that the power rates should be adjusted “but the way they were increased is something that should be looked into.”
He added that in other places, customer complaints against utility firms are heard by a neutral administrative judge.
“I’m not challenging the integrity of Mr. (Linn) Asper (CUC’s administrative hearing officer), but in other places customer complaints are heard on neutral ground, by an administrative judge (who holds office in local courts),” he said.
Asper ruled on Monday that CUC’s new power rates had been legally imposed.