CUC’s Profit & Loss Statement submitted to the Legislature show that in 2005 the agency earned $78.9 million but spent over $95 million, leaving it with a deficit of $16.1 million.
In 2006, CUC earned more —$88.327 million — as consumers were charged electric fuel rates in their electric bills.
Yet that year, CUC spent over $107.7 million — more than $19 million less than its operating revenues.
In 2007, its operating revenues totaled $99.9 million but its operating expenses were $100.9 million, leaving it with over a million dollar loss.
For the first six months of this year, CUC is already in the red by nearly $7 million despite raking in over $34 million in terms of electric fuel charge.
The utility corporation’s expenses for personnel and other administrative matters are pegged at over $13 million each year.
Production fuel is its single biggest expense.
In 2006, CUC spent over $76 million for fuel and $62.7 million the next year.
Thus far, CUC has spent close to $36 million for fuel.
Saipan power plants consume the most in terms of fuel as the island is the most populated and the center of business activities in the Northern Marianas.
CUC has three operating power plants on Saipan —1, 2 & 4.
Power Plant 2, which is capable of producing up to 3.3 megawatts, only will be decommissioned once the rented diesel generators from the U.K.-based Aggreko International Projects Ltd.’s Singapore depot office arrive and installed on Saipan.
“Power Plant 2 to be retired as the average production is only 12 kwh/gal,” CUC said in its presentation report.
There are actually six engines with a combined capacity of 15 megawatts at Power Plant 2 but only two are operational because CUC is still waiting for ordered parts/maintenance to make the other machines work.
Power Plant 1, the main source of electricity on Saipan is designed to produce 81.2 megawatts but is now able to produce only 16 megawatts with only thee engines running — and at less than half their original capacity.
Power Plant 4, which is operated by a private firm, produces 12.2 megawatts.
CUC said Saipan needs 41 megawatts to meet the demand of its customers.
Under CUC’s yet to be consummated contract with Aggreko, it will buy electricity from the firm for 5 cents per kwh as well as supply it with fuel.
CUC will then distribute the electricity to consumers on Saipan.
“The Aggreko warrants that for the base load operation at a constant load of 10 megawatts, the equipment will not consume more than .27 liter of the CUC supplied diesel fuel per kwh of power generated. In case the fuel consumption is higher than that is noted, CUC shall offset the additional cost of fuel from the payment due to the contractor subject to a cap of 5 percent of the monthly energy charge based upon the guarantee minimum offtake,” the contract stated.
Aggreko will provide for the lube oil as well as engineers/operators of the rented generators with the assistance of at least 6 CUC unskilled laborers.
In an interview, CUC Executive Director Antonio S. Muna admitted that the agency’s expenditures, combined with its debt servicing, far exceed its local revenue collections every month.
He said the agency’s monthly financial outlay is between $8 million and $9 million.
“The reason is we’re paying for past due accounts like Telesource, PMIC, DCM, and other vendors,” Muna stated, adding the monthly expenditures also include the salaries of CUC employees, operational expenses, and other things.
Telesource is the exclusive power supplier on Tinian and CUC owes the company over $800,000.
Pacific Marine and Industrial Corp. is the company that runs Power Plant 4 in Puerto Rico for which CUC pays $300,000 monthly due.
CUC also pays for the fuel supply of these two power companies. The agency pays about $2 million worth of fuel each month to PMIC.
Previously, CUC was able to provide fuel to Tinian by shelling out $347,699. Variety is yet to verify the estimated monthly total amount of fuel for the Tinian power plant.
DCM is the major contractor conducting repairs and maintenance of seven of eight engines at Power Plant 1 under a $5.1 million contract.
Muna told the Variety that CUC was able to pay $410,000 to DCM in April 2008.
DCM does not want to comment on CUC’s financial obligations to the company.
Muna said CUC is feeling the “pressure” from DCM.
He estimates the monthly revenue of CUC at around $7.6 million only, which means that the agency incurs a deficit between $400,000 and $1.4 million.
The monthly CUC expenditure and revenue figures cover the period from Oct, 1, 2007 to March 31, 2008, Muna said.
