CNMI MOVES TO PRIVATIZE POWER PLANTS

SAIPAN, CNMI (Marianas Variety, Jan. 2) - Utilities Corp. Chairman Francisco Q. Guerrero is asking the board to consider privatizing the power supply of at least two power plants on Saipan.

In his message to board members during their Tuesday meeting on Tinian, Guerrero said: "Privatization has shown that power purchase solicitation from independent producers and the subsequent selection has created significant competition among investors. This resulted in government receiving competitive proposals with relatively low prices compared to existing generation cost."

"Ultimately, the benefits from the reduced electricity prices will go to the public through smaller payments for their electricity bills," he added.

He said privatization needs "greater participation from the board and the management" to address legal and political issues, balancing private and public expectations, financing requirements, valuation difficulties, environmental issues and its effect on CUC regulatory functions.

"We need some legislative approval for regulatory drafting and negotiation in our financial and contractual documentation with full support from the Babauta-Benavente administration to carry out this venture," Guerrero said.

Maintenance of power plants is very costly.

Between 2001 and 2002, CUC spent $12 million to overhaul five power generators on Saipan to keep the machines in good shape and prevent unnecessary power interruptions.

January 3, 2003

Marianas Variety: www.mvariety.com 

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