Saipan Independent Rep. Stanley T. Torres, who chairs the House Committee on Public Utilities, Transportation and Communication, authored House Bill 17-80 which essentially seeks to restore CUC’s procurement authorities.
CUC, which is supposed to be an autonomous government agency governed by a board of directors, remains under the executive branch’s control through the monthly emergency disaster declarations signed by Gov. Benigno R. Fitial.
H.B. 17-80 seeks to repeal Sections 3 to 9 of P.L. 16-17 which was enacted after lawmakers overrode the governor’s veto on Oct. 1, 2008.
In his bill, Torres said portions of P.L. 16-17 placed restrictions on CUC which lead to inefficiencies that translate directly into higher costs to consumers.
“These inefficiencies must be removed. It is the purpose of this act to remove the impediments and inefficiencies and restore CUC’s procurement authority such that it will be able to enter into agreements with providers to ensure efficient delivery of services at reasonable rates to consumers,” Torres wrote in the findings of his bill.
One of the sections that Torres wants repealed — Section 3 —requires the privatization to be done through bids only through the Private Sector Assistance Agreement or PSAA procurement process.
“The Commonwealth Utilities Corp. shall not enter into any form of performance management contract, franchise agreement, or private sector assistance agreement unless the agreement is awarded pursuant to an invitation to bid. No such contract shall be awarded pursuant to a request for proposals,” Section 3(a) of P.L. 16-17 mandates.
This section further limits the PSAA to either of the following: privatized generation of electrical power for a limited term not to exceed five years; a concession or franchise agreement by which CUC transfers a utility service, including the related required capital investment, to the private sector for a limited term not to exceed 25 years; a contract for a public utilities cooperative; a build/operate/transfer contract; a contract for an independent power producer; or full privatization of CUC.
The full privatization of CUC’s operations is contingent upon the winning private investor’s willingness to invest at least $250 million in the corporation either in cash or a combination of cash or infrastructure.
Section 4 mandates the Commonwealth Public Utilities Commission to review the privatization agreement and sanction it within 42 days.
The other sections Torres wants repealed deal with CUC’s procurement and employment rights, title to property and easement rights and the right of CUC customers to use renewable energy where possible.
The government owes CUC $3.8 million in utility bills.
