Sen. Paul A. Manglona, R-Rota and chairman of the Senate Committee on Public Utilities, Transportation and Communications, said the hearing for Senate Bill 16-43 starts at 10 a.m. today.
Senate President Pete P. Reyes, R-Saipan, sponsored the bill which will amend Public Law 16-17, or the CUC Private Sector Partnership Act of 2008, to remove the clause requiring a $250 million investment from the winning bidder over the next 40 years.
The administration and some lawmakers believe this provision will result in an increase on power rates to enable the winning investor to recoup its investment.
“Any purchaser, would naturally, have to recoup this investment and would, necessarily, have to dramatically increase the rates charged to customers to recover the cost. The Legislature finds that maintaining this artificial floor will greatly harm ratepayers and the economy of the CNMI,” states S.B. 16-43.
P.L. 16-17 became law after the Legislature overrode the governor’s veto on House Bill 16-77.
The $250 million price tag was one of the reasons cited by Gov. Benigno R. Fitial in vetoing the bill.
The new law allows the privatization of CUC’s power plants through a competitive bidding process and calls on the administration to appoint eight members for the CUC board —one each from Rota and Tinian, two women and five with experience in the business sector.
Each board member must be confirmed by the Senate and will serve for four years.
It also mandates CUC to hire a U.S. certified contractor to evaluate the bids.
