PRICEY POWER SHUTS TINIAN BUSINESSES

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SAIPAN, CNMI (Marianas Variety, June 13) – A Commonwealth of the Northern Mariana Islands Department of Commerce official here says many businesses have shut down due to the increasing cost of electricity.

Matthew Masga, the department’s resident director on Tinian, said the high power rate is also affecting the residents’ ability to buy basic commodities.

"(The Commonwealth Utilities Corp.) is giving us a hard time. The government should find an ultimate solution to our energy (problem). We have to do it now before the fuel price rises again," said Masga.

CUC doubled the cost of electricity in July 2006 by adopting a new formula that allows it to adjust its fuel rates based on the price of imported fuel from Singapore.

This month, residents are charged 23.7 cents per kilowatt hour for the first 500 kwh they used. This rate does not include the nonfuel charges and the basic customer charge of $5.60 a month.

Prior to the implementation of the new power rates, residents in the CNMI paid only 11 cents per kwh and an additional 3.5-cent fuel surcharge.

On Tinian, the price of fuel is higher than Saipan’s.

A gallon of gasoline is sold at $3.96 on Tinian compared to Saipan’s $3.54.

"Businesses are closing because of the high cost of fuel and high prices of commodities. People here are paying for everything so much," said Masga.

Tinian generates much of its revenue from Tinian Dynasty Hotel & Casino, the only major business establishment on island.

But the hotel also feels the pinch of the higher cost of electricity, especially when it doesn’t have many guests.

Government statistics show that revenues from Tinian’s gambling and casino industry reached about $4.9 million last fiscal year.

The amount, however, is barely enough to cover the municipality’s annual expenses, and revenues from Saipan still have to cover Tinian’s shortfall.

Masga said the 50 cents increase in the $3.05 hourly minimum wage rate effective next month will further burden their island’s economy.

"Some small stories, small restaurants, will likely close. Some businesses will stay but they will be run by family members because they can’t afford to hire workers anymore," said Masga.

There are approximately 4,000 residents on Tinian, including guest workers.

"The main issue on Tinian is energy. Ultimately, the government has to find a way to solve this," he added.

[PIR editor’s note: According to PIR archives a California-based firm suggested renewable energy potential for the islands at the beginning of this year. Later, in April, two lawmakers in CNMI proposed the development of nuclear power as an alternative power source.]

Tinian’s energy is supplied by the private firm Telesource CNMI Inc.

CUC contracted Telesource to generate electricity for Tinian but it still supplies the company with fuel.

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