By Gregorie Michael Towai (Eipéráng)
For Variety
AFTER spending the past week conducting an in-depth study of the Commonwealth Utilities Corporation from its inception to the present day, reviewing its historical structure, recurring crises, operational patterns, fuel dependency, infrastructure vulnerabilities, and decades of public frustration, I came to one deeply troubling conclusion:
One of the most dangerous things that can happen to a society is not the crisis itself.
It is when the crisis becomes normal.
When children grow up assuming power outages are simply part of island life. When families instinctively buy generators before furniture. When businesses calculate losses from outages into their normal operating expectations. When disaster preparedness stops feeling temporary and starts becoming permanent lifestyle adaptation.
That is when instability quietly embeds itself into the culture.
And over time, people stop asking whether things should function better at all.
The recent Fuel Adjustment Charge increase is not just about electricity rates. It reflects something much deeper that many people across the Commonwealth are feeling but may struggle to articulate:
Fatigue.
Not simply financial fatigue. Not simply disaster fatigue.
System fatigue.
The exhaustion that comes from constantly adjusting your life around uncertainty.
People in the CNMI have become extraordinarily resilient, but resilience can sometimes become a double-edged sword. The more adaptable a population becomes, the easier it is for dysfunctional systems to survive without truly changing.
Island communities become experts at improvisation. Families learn to stretch every dollar. Neighbors share resources. People develop backup plans for their backup plans.
And while these traits reflect strength, they can also unintentionally mask the seriousness of long-term structural problems because communities keep finding ways to survive despite them.
But survival should not be mistaken for sustainability.
A modern society cannot continue functioning indefinitely on improvisation alone.
At some point, governments must transition from emergency response thinking into long horizon planning. Not simply reacting to the next storm, the next fuel spike, or the next infrastructure failure, but designing systems that reduce the likelihood of recurring crises altogether.
Across the Pacific and throughout the world, island jurisdictions are already beginning to rethink what resilience actually means in the twenty first century.
Resilience is no longer just about recovery.
It is about continuity.
Can communications remain functional after disasters? Can decentralized systems keep portions of communities operational? Can infrastructure failures be isolated rather than collapsing entire grids? Can governments coordinate rapidly through modern digital systems? Can schools, clinics, and emergency shelters operate independently when centralized systems fail?
These are no longer futuristic questions. They are modern governance questions.
And increasingly, younger generations are beginning to notice the gap between what is possible elsewhere and what has become normalized at home.
That realization matters.
Because perhaps the greatest risk facing the CNMI is not only economic stagnation or infrastructure vulnerability, but the gradual normalization of lowered expectations itself.
A society that begins expecting dysfunction eventually stops demanding excellence.
That is dangerous for any democracy.
The Commonwealth has talented engineers, planners, tradesmen, entrepreneurs, educators, public servants, and young people capable of helping shape a more resilient future. What has often been missing is not intelligence or capability, but long-term continuity of vision beyond election cycles, political divisions, and reactive policymaking.
The CNMI does not lack potential.
It lacks systems designed with future pressures in mind.
Climate pressures will intensify. Global fuel markets will remain volatile. Supply chains will continue facing geopolitical disruptions. Pacific islands will increasingly face strategic competition, environmental uncertainty, and economic instability simultaneously.
These are not temporary conditions anymore. They are defining realities of the era ahead.
Which means the conversation can no longer remain limited to short term fixes every time another crisis emerges.
The larger question now is this:
What kind of future are we normalizing for the next generation?
One where instability is accepted as unavoidable? Or one where island communities begin demanding infrastructure, governance, and long-term planning that reflects the realities of the modern Pacific?
Because eventually every society reaches a crossroads where it must decide whether resilience simply means enduring hardship or finally building systems that reduce it.
The Commonwealth may be approaching that moment now. Read my comprehensive research findings below and decide for yourself:
COMMONWEALTH UTILITIES CORPORATION: FROM INCEPTION TO THE FAC CRISIS Executive Summary
The Commonwealth Utilities Corporation (CUC) was created by CNMI law in 1985 and officially assumed utility operations in 1987. From the beginning, CUC was expected to become financially self-sustaining through full cost recovery. However, CUC’s own historical records acknowledge that this goal was never fully achieved.
That failure became the foundation for many of the utility’s long-term problems. Over the decades, CUC accumulated multiple structural weaknesses, including:
• Chronic financial instability
• Large unpaid government receivables
• Aging infrastructure
• Heavy diesel dependence
• Environmental compliance failures
• Governance inconsistencies
• Weak resilience planning
• Delayed fuel-cost reconciliations
Rather than being caused by a single event, the 2026 Fuel Adjustment Charge (FAC) crisis was the result of years of unresolved institutional and operational problems.
Financial Overview
CUC’s audits consistently showed operating expenses exceeding operating revenues. FY 2023 audited figures showed:
• Operating revenue: approximately $101.3 million
• Operating expenses: approximately $116.1 million
• Loss before capital contributions: approximately $18.4 million
FY 2024 unaudited reporting showed:
• Operating revenue: approximately $106.7 million
• Operating expenses: approximately $120.8 million
At the same time, CUC continued carrying:
• Large environmental liabilities
• Preferred stock obligations
• Deferred liabilities
• Massive receivables from government customers
Federal grants and public support became essential to maintaining operations and infrastructure projects.
Operational Weaknesses
CUC remained overwhelmingly dependent on diesel generation. Federal energy analysis estimated that more than 99 percent of power generation relied on diesel fuel.
This created several vulnerabilities:
• Exposure to global fuel-price spikes
• Limited fuel storage capacity
• Aging generators
• High storm vulnerability
• Fragile transmission and distribution systems
CUC’s own FY 2024 reporting acknowledged diesel-engine failures at major power plants on
Saipan and Rota.
Then Super Typhoon Sinlaku in April 2026 exposed how fragile the system remained. The storm caused:
• Island-wide outages
• Water-service interruptions
• Damaged poles and transformers
• Broken transmission infrastructure
• Long-term recovery delays
Many residents remained without stable service weeks after the storm.
The FAC Crisis
The Fuel Adjustment Charge increase became one of the most controversial developments in recent CUC history.
CUC argued that the increase was necessary because global ultra-low sulfur diesel prices sharply increased in April 2026. Officials warned that monthly fuel costs had nearly doubled.
However, CPUC records also showed that:
• Historical FAC reconciliations had not been properly completed
• Customers may have previously been overcharged
• Refund obligations may have existed
As a result, many residents viewed the increase as unfair because:
• Recovery from Super Typhoon Sinlaku was still ongoing
• Many homes still lacked stable service
• Water insecurity remained widespread
• Reconciliation issues remained unresolved
Major Historical Timeline
1975
Covenant transition period begins
1985
Public Law 4-47 creates CUC
1987
CUC officially assumes utility operations
2006
CPUC established as external regulator
2008
Public Law 16-17 restructures CUC and authorizes $45 million preferred stock obligations
2009
Emergency declarations issued over generation failures
2011
EPA lawsuits and stipulated reform orders imposed
2014
Court invalidates major power agreements
2014 onward
Base electric rates remain largely unchanged while FAC dependence grows
2025
CPUC freezes FAC and orders historical reconciliation
April 2026
Super Typhoon Sinlaku causes widespread utility damage
May 2026
FAC sharply increases to $0.44489/kWh
Simplified Flowchart
CUC Created (1985)
↓
Operations Transfer (1987)
↓
CPUC Oversight Established
↓
Financial & Generation Crises
↓
EPA Orders & Legal Challenges
↓
FAC Dependence & Underinvestment
↓
Super Typhoon Sinlaku
↓
2026 FAC Crisis
Conclusion
The FAC crisis was not simply the result of rising fuel prices.
It represented the cumulative effects of decades of unresolved structural problems involving governance, infrastructure, financial management, regulatory oversight, and resilience planning.
The broader lesson is clear:
A utility system cannot sustainably depend on emergency grants, deferred maintenance, unstable fuel pass-through systems, and disaster recovery funding alone.
Long-term reform will require:
• Transparent governance
• Stronger financial accountability
• Infrastructure modernization
• Renewable-energy diversification
• Improved resilience planning
• Restoration of public trust
Gregorie Michael Towai (Eipéráng) is a CNMI born independent researcher, cultural advocate, and founder of the Refaluwasch Journal of Knowledge and Culture (RJKC). His work focuses on Pacific governance, resilience, Indigenous stewardship, and sustainable futures for island communities.
