“The burden carried by the people of the CNMI over the years, is the accumulation of the costly mistakes of the executive director who replaced me,” Guerrero said in an eight-page letter to the Variety.
Villagomez, he added, has two and a half years to turn around CUC.
“What has he delivered to all of us? Higher bills and more outages,” said Guerrero who served as senator from 2000 to 2004.
He said he does not intend to run the utilities agency again and “clean up [this] incredible mess.”
He added, “I am also suffering from the effect of high power tariffs and constant outages on top of a collapsing economy.”
Wrong fuel
According to Guerrero, high speed power engines that consume more fuel will be used by U.K.-based Aggreko International Project Ltd., which recently signed a contract with CUC to provide temporary power on Saipan.
“The faster the engine, the less efficient is the fuel consumption,” the former CUC chief said. “Now we are…using high speed peaking machines for base load. The result will be higher costs [of power rate], to be passed on to residents and business community [on island].”
The price of heavy fuel oil in the market today is $2.68 per gallon while diesel no. 2 costs $4.21.
“CUC is using the wrong oil for the engines,” Guerrero stated. “And guess who switched the Power Plant 1 fuel from heavy fuel to diesel no. 2?”
He said, “CUC has suffered over $270 million in losses from this single mistake perpetuated by the most incompetent utility manager that I have ever come across.”
DCM contract examined
The former CUC chief also noted that the agency’s contractor, DCM, has not lived up to its $5.1 million contract.
Mitsubishi Heavy Industries Ltd. submitted a bid for the rehabilitation of Power Plant 1 engines amounting to $21,910 only.
Mitsubishi, he said, informed CUC that some engine parts would take at least 200 days to manufacture. “Mitsubishi provided detail[ed] listing of the parts needed replacement. Despite having this information, the Ben Fitial administration decided that DCM is more qualified and knowledgeable,” Guerrero said.
Power Plant 2
CUC hired CISCO to rehabilitate Power Plant 2 engines sometime in May 2006 under a sole source contract, according to Greg Cruz of Taotao Tano.
CISCO’s rehabilitation effort at Power Plant 2 has been stopped due to lack of parts.
“Why no default has been issued for such delayed work remains a mystery,” Guerrero said.
“CUC oil storage facilities at Lower Base are [also] in the brink of a catastrophic failure,” he said. “Tank 104, which has over 300,000 gallons of used and contaminated fuel, is ready to fall apart.”
He also noted the leaking oil drums in the storage facilities, saying that despite the penalty of $32,000 a day imposed on CUC by the U.S. Environmental Protection Agency, “CUC has yet to resolve this problem.”
This scenario endangers CNMI waters, he stated.
“CUC needs capable project managers and engineers to assist the executive director to get the power plant back in shape.”
