CUC Executive Director Antonio Muna told lawmakers in a presentation on Thursday that the agency projects to pay a total of $96.1 million for diesel fuel in fiscal year 2008, which ends tomorrow.
He said CUC “hopes to achieve…financial stability through a rate implementation reflecting 100 percent recovery of costs and increased consumer base.”
CUC will submit a “rate case” to the Public Utilities Commission by Oct. 30, he added.
According to Muna, the recent price reduction of diesel fuel has provided some relief, “however, a changeover to lower cost fuel like [heavy fuel oil]/bunker oil including the required logistical improvements in terms of piping, storage and environmental improvements would be a key component in the long-term planning of the generation improvement….”
He said CUC is now looking into the “feasibility for fuel conversion” to HFO.
The HFO conversion for four engines at Power Plant 1 will cost $7.5 million, he told lawmakers.
The privatization of power generation and distribution as well as renewable energy projects are part of CUC’s “recovery process” that requires CNMI and federal support, Muna added.
Former CUC Executive Director Ramon S. Guerrero earlier blamed his successor, Timothy P. Villagomez, now the lt. governor, for switching from HFO to diesel fuel.
Taotao Tano president Greg Cruz said using HFO “will drop the rate anywhere from 30 to 40 percent. But in order to do so [CUC] must bring the HFO system up to par. The [Environmental Protection Agency said] that CUC needed to extend its exhaust smoke stacks due to environmental concerns. This can be easily achieved and a concentration on the matter is needed.”
Muna, in his presentation before lawmakers, provided the following figures on CUC’s monthly fuel spending:
Oct. 2007 — $5.14 million
Nov. 2007— $5.25 million
Dec. 2007— $5.73 million
Jan. 2008 — $5.96 million
Feb. 2008 — $5.95 million
March 2008 — $6.09 million
April 2008 — $6.74 million
May 2008 — $7.52 million
June 2008 — $8.65 million
July 2008 — $9.1 millionThere were no figures given for August and September.
