Solar bidder warns of financial risks; CUC counsel says ratepayers protected

A consortium disqualified from the Commonwealth Utilities Corp.'s solar energy bidding has warned that the proposed 25-year power purchase agreement with Eastern Power Solutions could expose CNMI ratepayers to financial risks if the developer fails to secure financing or complete the project on time.

But CUC legal counsel Tina Ngo dismissed those concerns, saying Eastern would shoulder the entire estimated $225 million investment, with CUC paying only for electricity actually purchased and used.

In an email to Marianas Press, Sunmoon Ahn, local agent of the CS Tech Consortium, questioned Eastern's financial capacity, particularly statements during Commonwealth Public Utilities Commission proceedings that the developer and the special-purpose company expected to sign the agreement currently have no assets.

Ahn also warned that the project depends partly on a federal tax credit covering approximately 30% of its cost, with the solar facilities required to be operational by Dec. 31, 2027, to qualify.

"So if the tax credit is lost or the financing does not come together as planned, nothing solid stands behind the project to fill the gap. In that structure, the developer’s risk becomes the CNMI’s risk," Ahn said.

He also questioned the urgency of approving the agreement while AP Energy Investments' procurement challenge remains pending in Superior Court.

Responding to Marianas Press on Oct. 29, Ngo said neither CUC nor CNMI ratepayers would shoulder construction costs or expenses to upgrade the power grid.

"CUC and the CNMI do not pay a cent—not one penny—for any of the construction costs or the costs to upgrade the grid for safe connection with the solar farms," she said.

Ngo said that if Eastern's financing falls through and the solar facilities are not built, CUC and its customers would incur no financial loss from the failed construction.

She also explained that Eastern's special-purpose vehicle, or SPV, is not expected to hold assets until the project receives regulatory approval.

Once approved, she said, the SPV would acquire assets including the solar farms, land leases, and power purchase agreement.

Ngo said such arrangements are common in large-scale solar projects, including those in Guam and American Samoa.

She added that Eastern's parent company has provided written certification pledging financial backing for the project.

On the federal tax credit deadline, Ngo said CUC customers would not shoulder additional costs even if Eastern fails to qualify.

She said Eastern would remain contractually obligated to construct the solar facilities and upgrade the grid despite losing the anticipated tax credits.

Ngo explained that Eastern's Oct. 31 deadline for CPUC approval reflects the time needed to complete environmental studies, obtain permits, clear land, procure equipment, and hire workers before construction.

"So time is truly of the essence here, and they’re taking a big risk by waiting this long for CPUC approval," she said.

On AP Energy's pending lawsuit, Ngo said CUC considers the challenge without merit, noting that AP Energy's bid had already been rejected by the proposal evaluation committee, CUC executive director, and CUC board.

She also cited a March 2026 court ruling rejecting AP Energy's initial request for a temporary restraining order.

Ngo maintained that the pending litigation does not legally prevent CUC from proceeding because no court order currently bars the agreement.

"If CUC allowed a disappointed bidder to halt all of its projects with endless protests and appeals, CUC would not be able to get anything done and operations would come to a screeching halt," she said.

Ngo also questioned CS Tech's criticism, saying the consortium was among 10 companies that submitted bids but was disqualified for missing documents and submitting others in Korean despite an explicit requirement that all submissions be in English.

She stressed that even without its disqualification, CS Tech would still have competed against three other companies that reached the final round.

Ngo said the consortium never filed a formal protest challenging its disqualification, allowing the deadline to pass.

Ahn earlier maintained that CS Tech, which includes a South Korean government-owned power company, had offered electricity below Eastern's proposed 18.5 cents per kilowatt-hour.

"Our proposal was disqualified under the requirement to submit three years of the bidding company’s own audited financial statements. That happened before our price, experience or financial strength were ever reviewed," Ahn said.

Despite his concerns, Ahn said his consortium supports renewable energy development and reducing the CNMI's dependence on imported diesel fuel.

He urged CUC and the CPUC to carefully examine developers' financial stability, construction experience, and ability to fulfill long-term obligations before committing ratepayers to a 25-year agreement.

"Best value is not only the price on the first day. It means the project actually gets built, runs reliably, and keeps its promises for the full 25 years," Ahn said.