The governor, CUC and the Saipan Chamber of Commerce believe that the $250 million “price tag” mandated by P.L. 16-17 will result in “hidden costs” imposed on consumers.
But Rep. Heinz S. Hofschneider, the author of the law that was enacted after legislators overrode the governor’s veto, said his measure’s goal is to ensure affordable rates and a reliable power supply.
“That’s the bottom-line,” he said.
According to Hofschneider, R-Saipan, the $250 million amount will prevent a “fire sale” of CUC’s power division.
“As I’ve said before, that amount can be paid in cash or equivalent infrastructure improvements in a 40-year period, and it’s based not on CUC’s fixed assets or equipment, but on the economic potentials of being the sole provider of power in the CNMI,” he said.
Hofschneider said lawmakers are aware that the private company taking over CUC’s power division “will essentially be a monopoly.”
“Without the safeguards we put in the law, privatization can be disastrous to the consumers,” he added. “That’s why we insisted on a $250 million price so that we attract only the best global players — big companies that can deliver reliable power and can weather any economic difficulties facing our island community. We want a legitimate, qualified company with the technical know-how and deep pockets.”
But, he added, “we also want affordable power, and that’s why we required the private company to invest in renewable energy sources — that’s part of the $250 million price tag. The company will get credit for investing in renewable energy to meet at least 50 percent of the demand — that’s clearly stated in the law.”
Hofschneider said he has not seen the Senate legislation that will reduce the $250 million amount, but added that he is drafting a bill to amend P.L. 16-17.
“We can scale down the price as long as it will not result in a fire sale of CUC’s power division,” he added.
