2006 A ‘DARK’ YEAR FOR LONG-SUFFERING CNMI

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2006 A ‘DARK’ YEAR FOR LONG-SUFFERING CNMI

By Ferdie de la Torre

SAIPAN, CNMI (Saipan Tribune, Jan. 1) – The year 2006 was literally a dark period on Saipan.

Constant power engine trouble and the Commonwealth Utilities Corp.'s cash flow problem plunged the island into darkness many, many times. As a result, unannounced and rolling blackouts crippled the operations of many small businesses on the island.

This was the year when CUC not only hurt people's pockets when it increased power rates despite their strong objections; it also exacerbated the ability of businesses to weather the economic slowdown.

The very first week of the year was greeted with power outages due to engine trouble at CUC's Power Plant in Lower Base. At that time, the government was subsidizing CUC's fuel costs with at least $2 million a month to purchase fuel in order to sustain power generation.

As CUC was without a board and an executive director then, in the latter part of January Gov. Benigno R. Fitial placed the utility agency under the administration's direct control by declaring it under a state of emergency.

In March, Fitial's first executive order caused CUC to cease as an autonomous agency; it was integrated as a division under the Department of Public Works.

The following month, in his State of the CUC Special Report, Lt. Gov. Timothy P. Villagomez disclosed that even with the implementation of the emergency fuel surcharge fee in 2005-a fee that brings in an average of $1.2 million per month-the utilities agency still expects a deficit between $30 million to $32 million before the end of the year.

In June, blackouts hit many villages on the island for several days. The reasons: old transformer, broken power pole's cross arm, cylinder problem, and engine overheating. Even CUC's failure to make a timely payments for fuel also triggered outages.

The engine's cooling system at Power Plant 1 overheated and was punctured in the process, forcing CUC to implement load shedding.

The administration had instructed department heads to conserve energy and for each agency to pay for their own electric bills using there own line item budget.

The administration also requested major hotels and garment factories to use their own generators, while mechanics tried to repair two units at Power Plant I that overheated due to high customer demand.

In July, the Economists.com, a consulting firm hired by CUC to conduct a rate study, informed the public about the importance of imposing new power rates.

On the same month, CUC completed drafting the emergency regulations to implement within 10 days the new power rates that were recommended by Economists.com.

Due to limited fuel and power supply produced at the power plants, CUC started the rolling outages.

Fitial signed the emergency regulations, which CUC then implemented on July 22.

By August, when consumers started receiving their billings under the emergency regulations, many were stunned to see their high electric bill, which had doubled.

As the emergency regulations would take effect only for 120 days, CUC hinted of its intent to file permanent regulations for the new power rates and not to extend the emergency regulations.

CUC then conducted public hearing on Saipan, Tinian, and Rota.

At a public hearing on Saipan in October, many showed up to express their disappointment over the sudden rate increases. They assailed CUC for its alleged inefficiency and negligence.

Led by Reps. Stanley T. Torres, Joseph Deleon Guerrero and Francisco S. Dela Cruz, consumers said the new rate structure was not acceptable. Some even proposed a gradual increase rather than such sudden high rates.

Just the same CUC made the emergency regulations permanent in early November.

Some people voiced their strong protest. About 100 people, mostly those whose power got disconnected, trooped to the federal court supposedly to attend a status conference about the reopening of a 1993 class lawsuit against CUC.

CUC later claimed that they re-connected the power to all customers who have contested their utility billings.

But just two weeks after the lifting of the blackout rotation, CUC implemented again the rotating outages, affecting almost all areas on the island for several hours.

CUC again cited power generation malfunctions as the culprit. After the repair, rolling outages were lifted again.

Meanwhile, CUC set administrative hearings to hear the customers' complaints.

People have been conserving energy, but are still paying more. Outages remain a dark reality for most people on the island. The whole year has been nothing but outages and high power rates and engine breakdowns-with no actual, concrete efforts seen to address the situation at CUC. As to what will happen to the utilities agency, proposals have been made to privatize it but this is no guarantee that rates will go down.

For most people, the yardstick is quite simple: Stop the outages and adjust the rates to a level that they're comfortable with. Only then can people say that things are quite OK at CUC.

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