CUC signed a $6 million deal with the U.K.-based power firm on June 19 to provide Saipan temporary power generation services.
Muna said a 7 percent interest rate is attached to the MPLT loan which requires legislative approval.
But according to Rep. Victor B. Hocog, Ind.-Rota and chairman of the House Committee on Public Utilities, Transportation and Communications, “MPLT has rescinded its approval of the loan.”
MPLT requires the utilities agency to submit a budget amount to the Legislature prior to the approval of the loan, he said.
Hocog believes that CUC may require more than $4.5 million in view of its other financial obligations with other power companies and its fuel purchases.
CUC has outstanding debts to Telesource CNMI Inc., DCM Group Inc., Pacific Marine and Industrial Corp. and other firms.
According to Hocog, CUC told him that it will use about $2.7 million of the MPLT loan to purchase fuel. He opposes the idea.
He said he supports CUC’s loan application under the assumption that the contract with Aggreko is authorized by law.
He doubts the validity of Aggreko’s power generation proposal which was submitted two years ago. If Aggreko’s energy proposal is no longer viable, Hocog said CUC must cancel the contract and announce a new request for proposals.
Yesterday, CUC’s power division acting manager Gary P. Camacho said engine #6 at Power Plant 1 suffered mechanical problems with its fuel injectors and exhaust valves causing power interruptions on island. The high temperature also affected engine #6, leaving engines #2, 3, and 8 online. Engine #6 encountered problems in the early morning, and was put back online at about 6:15 p.m.
