GOVERNOR Palacios has appointed his former high school classmate, Simon A. Sanchez II of Guam, to serve as CUC board member. A former Guam senator, Mr. Sanchez is also a businessman and, since 2003, a member of the island’s Consolidated Commission on Utilities, an autonomous body with five elected non-partisan members who oversee the operations of Guam Power Authority and Guam Waterworks Authority. Mr. Sanchez also has a B.A. in history from Stanford University, and a master’s degree in urban planning from Harvard.
On Thursday, April 27th, he appeared before the CNMI Senate executive appointments committee which was reviewing his nomination. His remarks were highly instructive, insightful and — a rarity among public officials — b.s. free.
He reminded CNMI senators that 20 years ago, Guam’s hospital wasn’t paying its power bill, while the government of Guam was way behind on its power bill. “But 20 years later,” he said, “the hospital is current, the government of Guam is current, the residential community is current, the commercial community is current. People are — even though it’s difficult, you know, and oil is the biggest challenge to energy costs here in this region — people have found a way to prioritize the payment of their bill.”
He noted that the people, who are the “owners” of public utilities, are also their customers. “And of course, as customers…we want free power and don’t have to pay for anything. But as owners, we know that’s not going to work. Oil is not free, transformers are not free, generators are not free, labor is not free. And so how do we strike that balance and find…the resources and mak[e] sure those resources are applied correctly and wisely? And that’s the immediate challenge of CUC [board members] here — to run these entities knowing that even though they’re appointed and they’re confirmed, they still represent…the shareholders, the owners, the people of this community whose money is tied up in these assets, [and are] seeking good service at the lowest price possible.”
Incidentally, not so long ago, an elected CNMI official publicly said that CUC customers wanted first class services but didn’t want to pay for them. That elected official wasn’t re-elected.
In his remarks during the public hearing, Mr. Sanchez noted that CUC is already discussing how to “bring solar energy at a utility scale.” He believes it is CUC’s job “to provide access to solar energy or renewable energy…at a utility scale level for those that just aren’t going to be able to put a solar array on their roof.” However, “there’s no magic bullet,” Mr. Sanchez said. “I’m not here to say that we can fix things overnight, but I was very encouraged by the study that says we can probably put 10 to 20 megawatts of renewable energy on the Saipan grid and you need about 40 acres for every 10 megawatts. And the sweet spot is if you can come up with 80 acres for 20 megawatts — that’s where the economies of scale can really benefit…Saipan.”
He added, “Some people say, well, you should go to 100% renewable today. There…is one place in the world that is 100% solar, and it’s a small island [Ta’u]…in American Samoa. But…it’s $0.65 a kilowatt hour or twice what you’re paying here. So, yeah, technology will let you do it right. But can you afford the technology?”
With solar energy, he said, ‘the problem is when it’s dark at night…. What do you do? … [Y]ou need batteries. And batteries are not yet economic, but they are quickly [becoming] more and more economic.”
Another “challenge” is “when the good Lord brings cloud cover over a solar array, then you lose some generation capability…. If a cloud…comes over…you can lose five, 10, 15 megawatts in seconds…. And then it can come back, you know, two minutes later. And a battery is what helps stabilize that or a generator that is able to deal with fluctuations in energy on the grid. That’s what you need.”
With solar power, “your grid has to also be able to ‘speak’ renewables and ‘speak’ to what they call the intermittency of renewables. Unlike a car engine, when you turn it on, it runs steady…. Solar doesn’t work that way…. The good Lord…is in charge of the weather, and it’s not always consistent.”
As for wind power, Mr. Sanchez said: “We have typhoons. That’s why you don’t see wind [farms]…. It’s just too risky…. And they’re even more land intensive than solar farms.”
Guam and the CNMI, he said, “spend way too much money…to buy…oil….” Those days can come to an end, he added, but “it takes a steady commitment to doing it.” Which means investments in new technology and new generators, etc., which will require funding which is what the CNMI, right now, doesn’t have.
Hence, Mr. Sanchez recommends “public-private partnerships.” He said he will share Guam’s “templates for bidding for solar energy [and] public-private partnerships.” The government will provide the land, the private partner will build the solar array and operate it, “and then you can buy it back.” “So that’s a model that I’d be very interested to see if we could consider it here,” Mr. Sanchez said.
As for the current power rate, which is set primarily by the global price of oil, he compared it to a medical condition. “If you ever have to lose weight and you’re trying not to get diabetes, do you yell at your doctor?”
In other words, if oil prices rise, the power rate will rise as well so we have to reduce our power usage — instead of asking lawmakers to “do something” which usually involves conducting a public meeting with CUC officials who’ll once again remind lawmakers to appropriate funding for the CNMI government’s unpaid utility bills.
Mr. Sanchez recalled that when Guam’s utilities commission or CCU approved a rate increase, “we already had a senator saying, ‘I want to get rid of the CCU.’ … That’s [the] response.”
In the CNMI, he said, he believes that “the goodwill is here, the intelligence is here.” What is needed is a willingness to make “the tough calls and endure the talk show hosts and…the comments…but when you know you’re doing the right thing for the right reasons, you try to stay with it.”
He later added, “I think the questions are easy. The answers sometimes are hard.”
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Simon Sanchez
