Found the cause
The file is developed locally so it's not online. However, I found the cause: PowerCMS is overwriting the existing "menu.css" file inside CSSMenuWriter/cssmw/ directory when it is installed. I copy the original menu.css file back after PowerCMS is installed and the template menu is fixed. However, it breaks the admin menu now.
I'm sure you can recreate the glitch by creating a CSS menu via CSS Menu Writer first, then insert a PowerCMS editable region on the same page.
I guess the workaround would be to rename the PowerCMS edition of menu.css to something else, link that to PowerCMS admin dwt file, update the admin template, then copy back the original menu.css file to fix the front end template. This would be a problem though, when you create multiple CSS menus using CSS Menu Writer. Any fix for this?