ON July 6, 2022, the House utilities committee met with CUC officials to discuss an “emergency”: the ever increasing Fuel Adjustment Charge (a.k.a., FAC!) and how lawmakers seeking reelection could placate irate voters.
The CUC officials were led by their new deputy executive director, Chretien Voerg (pronounced “verge”), who patiently explained the FAC and other utility-related issues. He is a New York state-licensed professional engineer, and had been “running utilities in upstate New York for the last 11 years as an executive and prior to that approximately 10 years as an engineer.” He said when he was a 19-year-old Marine, he spent some time on Tinian, “and I fell in love with the CNMI…. I’ve been trying to get back here ever since…. So I’m happy to be here and to serve you….”
One would assume that after hearing from Mr. Voerg — who clearly knew what he was talking about — CNMI lawmakers would finally realize, or at least admit publicly, that lack of funding was (still is) the main problem at CUC, and that the Legislature, if it wanted to, could appropriate the funds that CUC needed.
According to Mr. Voerg, CUC “has been developing plans for years” for replacing its antique power plants which “should have died a long time ago.” But thanks to CUC’s maintenance staff, “they’re still running well beyond their useful life.” He added, “Our issue right now is funding. We have a number of outstanding accounts that have not been paid,” referring to the CNMI government’s utility bills. “Those…add up to…tens of millions of dollars,” and those funds could have gone to “replacing equipment at our power plants that would make us more efficient…. [I]t would reduce the amount of energy [fuel] we need to consume in order to produce that electricity…. So any assistance we could have in catching up on some of these arrears accounts…we’d appreciate that.”
What could be clearer? The CNMI government is CUC’s largest delinquent customer. The CNMI government’s failure to pay CUC is preventing CUC from reducing its fuel consumption, which is funded by the FAC, which rises when the price of oil rises, which infuriates voters.
Mr. Voerg gently reminded the elected officials who could appropriate funds needed by CUC to please appropriate those funds.
But lawmakers — then and now — would rather talk about something else: the venality of their political opponents, CPUC’s lack of quorum, net metering, renewable energy, Aggreko, old OPA reports, etc.
As for renewable energy, which many believe is the “miracle cure,” here’s what Mr. Voerg told the House members:
“There is a plan to diversify our power portfolio. That plan is active. It’s in place. [But] operating utilities is very complicated as far as…integrating new equipment with older technology and how that reacts in the grid. So part…of expanding our technology into renewables is making sure that we evaluate the reliability of our grid so that we can integrate these new resources without damaging the infrastructure we already have.”
In short, it’s not that simple.
Moreover, Mr. Voerg said, “diesel is definitely going to be the base of our power portfolio for a while because it is reliable. It’s 24-7. It can be brought on and taken off very easily.” Still, he added, “we already have solar in place…and we have plans for another 20-megawatt community-based solar, which is to me a very exciting opportunity for us and for our customers…. One of the biggest problems with a solar system of that size is getting the land necessary to build the solar farm. So…our executive director is working with DPL on identifying locations that would be suitable. They need to be in close proximity of the existing grid so that they can be tied in appropriately, but also the land needs to be available. So we’re talking in excess of 80 acres of land. That’s significant.”
Asked about a timeline for the project, Mr. Voerg replied, “We’re moving forward…but I don’t have an exact date for you…. There’s so many moving parts to a project that large.” He said CUC customers “who desire to install solar today do have that capability. It’s the net metering part, the feeding it back into the grid is the part that is on hold at the moment because of those dynamics,” referring to “the complicated parts of operating [a] grid.”
Meanwhile, “whether the hospital or any other government agency does not pay their bill, CUC has to figure out a way to survive. And part of that survival is not reinvesting in the infrastructure that we need desperately to be more efficient…. So we have a number of customers with large bills that are due…. We cannot distribute that arrears to other customers we don’t have. CUC does not have control over the [base] rate. The [base] rate was established and has not changed since 2014. So the only option we have is to be more efficient. But if we were able to bring that revenue…and reinvest into our infrastructure by getting more efficient engines and more renewable technology, that would have an impact on our customers because then the amount of fuel that we would need to use in order to generate the same amount of electricity would go down and that would be shared amongst the whole community. And that’s why we’re trying to emphasize that this isn’t an issue CUC has with any one or any number of government agencies. This is something CUC is advocating for our customers. If we can receive those arrears payments, we can reinvest in our infrastructure, we can put in more efficient and renewable and reliable equipment that then will result in a cost savings for our customers. It won’t be an immediate change. We will need the income to come in, we will need to invest in the infrastructure, and then we’ll start realizing the savings.”
It’s a damn shame that Mr. Voerg — like CUC’s other utility experts in the past — has resigned, and that CUC, once again, appears to be entangled in a chaotic situation that reeks of politics.
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