“The proposed loan will not cost more. The loan payments have already been incorporated into the electric base rate increase earlier this year,” he said.
The proceeds from the $10 million loan will purchase machinery and equipment, such as new oil-water separators, oil containment, storage tank repairs and replacements.
It will fund used oil programs, power transmission and distribution improvements, upgrades and overhauls to the power generation system such as engine overhauls, controls, firefighting equipment, and program maintenance.
“All of these projects are critical for CUC to meet its obligations under the [federal] stipulated orders,” he said.
Fletcher said the proposed loan will not increase CUC rates.
Rep. Stanley T. Torres, Ind.-Saipan, recently introduced House Bill 17-205 which requires CUC to seek the approval of the Commonwealth Public Utilities Commission for securing a loan that exceeds $500,000.
Fletcher said the bill supports CUC’s ability to comply with the stipulated orders and proposed loan.
The bill, he added, is important because the bank needs to have proof that the loan is authorized by statute.
“If CUC cannot get funding to complete [Environmental Protection Agency] required projects, then the ratepayers will have to pay for these projects — otherwise CUC will be subject to fines from EPA, as well as further action by the federal court,” he said.
Fletcher said H.B. 17-222, which provides for an advisory board of directors and authorizing the CUC executive director to act until a board is constituted, is a companion bill to H.B. 17-205.
“This bill is also important as the bank needs to have proof that CUC has authority to borrow,” he said.
House Floor Leader George N. Camacho, Ind.-Saipan, is the bill’s author.
