She said, “The policy decision has been to move away from the reliance on fossil fuel and to establish some form of providing utilities to consumers based on renewable or sustainable energy. This we hope will not only bring down the cost of fuel, but make it so we will not rely on outside sources.”
The decision she made on Tuesday was one of the more difficult decisions Alepuyo had to make.
“I hate to increase rates. But if you tell me I have to, I’ll do it and I’ll find the reason why. We’ve lived through eight hours of power outage here. I don’t want to go back to those days again,” she said.
Telesource’s current contract expires in March 2020, but with the Change Order No. 5 to Telesource’s contract, Alepuyo said CUC would be afforded the opportunity to sever its relationship with Telesource in five years.
Alepuyo said there is an opportunity now to develop renewable and sustainable energy on Tinian.
P.L. 17-87 mandates the percentage of renewable energy that any utility company should be providing the consumers, with the CNMI expected to reach 40 percent on or before Dec. 31, 2012.
She said a request for proposal for any form of sustainable, renewable energy could be issued. “Start it off on Tinian… and provide it to the rest of the CNMI.”
Alepuyo also stated her agreement with the legislative intent of wanting to provide renewable energy to consumers here in the CNMI.
“With our remote location, as long as we’re relying on fossil fuel, the cost of utilities will constantly be hinged on the cost of fuel,” she said.
During the April 2011 regulatory session, Alepuyo told the parties concerned that with Change Order No. 5, “I am seeing this as an opportunity for CUC to not just get out from under Telesource’s thumb by removing the exclusivity clause on renewable energy, but it is also taking away the requirement of $6 million buyout.”
Under Change Order No. 5, the relationship with Telesource contract with CUC extends to 15 years with a provision that reduces this to 5 years with CUC having to demonstrate that fossil fuel generation is no longer needed on Tinian.
Telesource is an independent power producer operating power generation facilities on Tinian.
The decision ran counter to the reports of Georgetown Consulting and Economists.com.
Based on the supplemental Georgetown report, Change Order No. 5 was “an uneconomic business proposition for both CUC and consumers.”
The amended contract would impose a $32 million additional costs to consumers over a span of 15 years, the report claimed.
It also estimated that the CUC could operate the Tinian facilities at 35 percent lesser cost than Telesource.
Georgetown also stated in its report that it finds it “improbable” for CUC to totally move away from fossil fuel dependence in five years.
However, Georgetown and Economists.com offered possible strategies to wean Tinian from fossil fuel dependence.
Among these strategies were deployment of renewable resources and use of bio-diesel fuel instead of fossil or petroleum-based diesel fuel.
Without using fossil-fuel based energy sources, a 100 percent renewable energy would require (1) selection, financing, and rapid deployment of renewable resources and appropriate storage capability; (2) wind resources pose issues that take time to resolve like wind mapping, typhoon integrity, rigging logistics, interconnection, etc.; (3) near-term renewable source would be photovoltaic solar panels with battery storage.
If Tinian were to implement a PV solar based system, the report claimed that project would cost $63 million above the projected cost of the existing Telesource contract until the contract expires in March 2020.
The report sees financing as a problem. It, however, sees grants could reduce the cost but are not expected to cover the entire cost.
The consultants also believe a 100 percent renewable energy based system on Tinian does not appear feasible without some form of fossil fuel based system backup taking into account the storage technologies available.
Meanwhile, use of bio-diesel instead of petroleum, specifically the use of B-100 does not appear to be prudent, according to the report.
The report also stated that the CUC can sever its relationship with Telesource by buying out the contract for $6 million and run the Tinian engines at 35 percent less than the cost Telesource operates the system and at the same time implement an alternative program.
