CUC: 20‑MW solar design on track; RFP for PPP expected in 60–90 days as senators press on fuel, rates

The Senate POTC committee heard updates Friday from Commonwealth Utilities Corporation (CUC) on power generation and distribution plans for Saipan, Tinian and Rota, including a 20‑megawatt solar design the utility said is on schedule and plans to issue a request for proposals for public‑private partnerships (PPPs) within the next 60 to 90 days.

The presentation and subsequent Q&A focused on timelines for the 20‑MW design, the status of diesel generation and fuel reserves, the utility’s net‑billing (formerly called net‑metering) study, and longer‑term options including micro‑nuclear technology and a Department of Defense‑funded master plan. Senators repeatedly pressed CUC on how renewable integration would affect reliability and customer rates.

Executive Director Watson told senators the 20‑MW solar design is “on track to be completed by April.” He said CUC plans to issue RFPs for PPPs not only for the 20‑MW project but for other items in the integrated resource plan (IRP) that consultant GHD presented. Watson added the design work is fully grant‑funded and that CUC wants to advertise the RFP soon so the grant funds are not lost.

Ivana Guillermo, a renewable energy engineer with CUC, told the committee that the utility’s goal by 2029–2030 is to reach at least 40% renewable penetration across the island systems and that the agency is still in a pre‑feasibility and design phase. “Our goal by 2029/2030 is to get to at least 40% renewable penetration for all systems,” Guillermo said. She described steps the utility is taking: property acquisition, SCADA and communications upgrades for faster field response, battery and inverter planning, and parallel procurement of new, more fuel‑efficient generation units to replace aging diesel plants.

Senators pressed CUC on immediate reliability. Committee members cited figures in the presentation showing limited spare capacity and asked about contingency plans if a major generator goes down. Watson said CUC is overhauling its fleet and intends to procure new diesel engines to replace aging units; he said protests delayed earlier purchases and that CUC now plans to go to bid to expedite new generators.

Fuel supply and price volatility were a persistent focus. During the hearing CUC staff reported available fuel on the island and the utility’s reserve: a CUC participant said there were 571,334 gallons available on a recent inventory and that the utility maintains about 17 days of fuel across tanks; another CUC speaker said the system holds “about almost 1,000,000 gallon[s] of fuel” in reserve. Committee members asked how fuel purchases translate into the monthly fuel adjustment charge (FAC). CUC staff said FAC is based on the market benchmark (referred to in the hearing as MOPS/MOPS‑type pricing) and the price CUC is charged by its fuel supplier, not simply the gallons already in tanks.

On rate design and customer‑side solar, staff said CUC has hired an outside firm (referred to in the presentation as economist.com) to conduct a cost‑of‑service and net‑billing study. CUC explained the utility is moving from the traditional “net‑metering” label to “net‑billing” and is examining a fixed standby or connection charge to spread system costs more equitably among all customers. CUC told the committee the consultant is within a 90‑day scope from notice to proceed and that public recommendations should be available within 30–60 days.

Committee members asked about other technologies and funding. Watson and Guillermo said CUC has discussed micro‑nuclear technologies with vendors and Department of Energy experts but cited seismic risk and a constitutional or statutory restriction in the CNMI as complicating factors. Separately, staff confirmed the Department of Defense provided a multi‑million‑dollar grant to the central government to fund a master plan for power, water, wastewater and telecommunications; bids for that master plan were in evaluation at the time of the hearing.

Senators and staff also discussed opportunities to pilot renewable projects on the outer islands, micro‑hydro feasibility on Rota’s gravity water system, and the need to replace old thermal units with smaller, more efficient engines to pair with variable renewable output. CUC cautioned that adding significant solar does not automatically lower retail rates: it reduces fuel consumption, but operational realities — including the need to run large generators at low load for reliability — can raise maintenance costs.

The committee recessed at 2:40 p.m. and scheduled a continuation at 9:30 a.m. on Feb. 26 to complete agenda items on CUC debt and other matters.

Sources: presentation and Q&A at the Senate POTC committee informational hearing on CUC; Senate members and CUC staff statements captured on the record.