Saipan — A Saipan construction company has proposed that the CNMI’s power plants be sold for $85 million, with the proceeds used to fund Typhoon Sinlaku restoration and provide a cash injection to the Commonwealth Utilities Corporation.
The proposal is laid out in a July 26 letter from International Bridge and Construction Marianas Inc. President Robert W. Toelkes to CUC Executive Director Kevin Watson. The letter is stamped as received at CUC on July 28. It was copied to CUC Board Chairman Allen Perez and all board members, Governor David Apatang, Lieutenant Governor Dennis Mendiola, and every member of the House of Representatives and the Senate.
Under the proposal, an entity the letter identifies as CaPFA would enter an independent power producer agreement with CUC to acquire Saipan Power Plant I, Saipan Power Plant II, Saipan Power Plant IV, the Tinian Power Plant and the Rota Power Plant. The letter states CaPFA would purchase the existing power plants for $85 million.
The letter proposes that the agreement be structured to allow multiple series of issuances, covering not only the initial acquisition but also funding for power plant rehabilitation or replacement and for projects intended to lower the cost of power and increase efficiency. It lists solar integration, reduced fuel usage or fuel cost, and operation and maintenance savings as examples. It states that all projects would be agreed upon between CaPFA and CUC before implementation.
The letter also proposes that funding use long term tax exempt debt with flexible payment terms, including the use of future FEMA reimbursements or grants for repayment.
Toelkes wrote that the letter follows comments made by CUC legal counsel during the July 16 board meeting regarding an earlier IBCM letter to Perez dated July 3. He also wrote that a letter delivered June 8 to Watson on a similar subject has, to IBCM’s knowledge, never been responded to or discussed.
The CUC Board of Directors meets in special session Wednesday at 8:30 a.m. An independent power producer and public private partnership item is on the agenda, along with an RFP for financing and an update on CUC’s financial condition and recovery status.
