What’s the rush?
A HOUSE bill that would result in new government costs is headed to a bicameral conference committee, which will try to come up with a compromise version. H.B. 23-97 would “create a revolving fund” for the Commonwealth Public Utilities Commission, and compensate the CPUC chair $1,000 a month, and the commissioners, $800 a month. It would also allow the five-member commission to hire an executive director and staff members.
Why does this financially struggling government need to incur additional expenses? Is there a pressing need for them? More pressing than, for example, medical referrals, local Medicaid or the Settlement Fund payments?
More questions:
What is the estimated cost if this bill becomes law?
What is the funding source? Fees? How much? And who will pay for them?
The backdrop for the 2006 law that created CPUC was rising fuel prices, rolling blackouts, a lack of funding for fuel for power plants, and the imposition of the (much-despised) fuel surcharge. The unstated role that CPUC was supposed to play was to serve as a “buffer” between an irate public and their elected officials, especially whenever CUC rates had to be raised. Regardless of the CPUC law’s intent, however, CUC still needed, and continues to need, funding to pay for the fuel that runs its (alarmingly) old power plants and generators. The fuel surcharge was “scrapped,” only to be replaced by LEAC (Levelized Energy Adjustment Clause), which was later renamed Fuel Adjustment Charge or FAC. It was CPUC that ordered CUC to collect FAC.
Do lawmakers actually believe that giving more funding to CPUC and allowing it to hire personnel would prevent future FAC hikes? How?
The voting public wants to know
IT’S already September, the last month of the current fiscal year. A new “balanced” budget for the next fiscal year has not been passed yet. The CNMI government has consistently missed its quarterly revenue projections. Tourist arrivals are still way below their pre-pandemic levels. The economy is still down. Happily, fuel prices are also going down, but this is only because of global events over which the CNMI’s government and its so many agencies and entities, CUC and CPUC included, have no control.
So again, we ask: In this harsh economic and financial climate, why are lawmakers considering legislation that would burden the government with additional expenses?
Where are your priorities, ladies and gentlemen of the Legislature?
Yet another ignored, if not forgotten, OPA report
IN a well-written and detailed 2017 audit report, which, sadly, remains relevant, the Office of the Public Auditor pinpointed the main challenge facing CUC: It “has not achieved its purpose to operate as an independent public agency with the legal and political independence to perform as a non-subsidized, autonomous corporation due to interferences by the legislature, various governors, and the boards of directors….” Our italics. Today, the government remains CUC’s largest delinquent customer. And it is the same government that likes to meddle in CUC’s affairs every time voters complain about “high” power rates that are caused by significant increases in the global prices of fuel.
OPA, in its report, also noted that CUC “faced reduced operating flexibility related to establishing rates following the creation of CPUC…. Now, CUC can no longer implement rates and other charges for utility services without prior approval of CPUC, [which] created another layer of difficulty, making it hard for CUC to operate independently.”
OPA added, “To continue to assume that a politically appointed board of directors whose members…are subject to the orders and influence of the legislature and the governor will lead the corporation to success and sustainability is to ignore the realities of CUC’s financial condition and operations.”
And what is the Legislature’s “solution”?
Let’s provide yet another layer of government, another politically appointed entity, with additional funding and personnel to “oversee” CUC.
Insert facepalm emoji here.
