When politicians need a villain
CUC’s Fuel Adjustment Charge is rarely an issue until global fuel prices surge and remain elevated. When that happens, the FAC suddenly becomes an outrage — along with CUC itself, especially its management.
A curious thing to hear: an elected official condemning CUC’s management while praising its rank and file for their “good work.” Who does he think oversees them and sets the direction needed to ensure efficient operations?
All we usually get is hot air from Capital Hill. In contrast, we get power, water and sewer services from CUC, which is quite possibly the most vital government entity there is — powering the hospital, clinics, schools, airports, businesses, households and the internet, the crucial link we have to modern living and the 21st century.
Which would you rather endure for a month: a Legislature that does not convene, or a CUC that ceases operations?
Again, we have to point out what many seem to have forgotten. Though supposedly “autonomous,” CUC is knee-deep in the murky waters of politics because of the frequent and repeated meddling of whatever politicians are in power. Politicians continue to call the shots at CUC. But whenever CUC has to make hard decisions to cope with what are, for the most part, politically created problems, guess whom the politicians blame?
Consider the FAC
OVER two decades ago, after promising the abolition of the fuel surcharge, politicians in office ultimately had to allow the implementation of the FAC. Why? Because someone has to pay for the fuel CUC purchases to power its generators.
When the local economy was booming, the CNMI government subsidized CUC’s fuel consumption. When the economy tanked, the government could no longer afford to pick up the tab. Well, technically it still could, but only by stiffing government employees and retirees through spending cuts, or businesses and other taxpayers through tax hikes.
Most politicians, however, do not want to be voted out of office. So they settled on the FAC, which is identical to a mechanism utilized by the vast majority of electric and gas utilities across the United States.
When fuel prices go down, the FAC goes down. When fuel prices rise, so does the FAC. Not surprisingly, no one has ever complained about lower fuel prices. It is when prices soar — usually because of politically manufactured crises such as wars — that we suddenly seem unable to comprehend why the FAC must increase as well.
Not many of us seem willing to acknowledge that CUC does not set fuel prices. But it still has to pay the prevailing market price so the island’s power plants can continue providing us with electricity, water and sewer services.
Faced with rising prices, the rational reaction of consumers is to reduce consumption. Electricity, after all, is less like a fixed monthly mortgage and more like a grocery budget. We can, for example, identify the high-wattage culprits among our appliances and cut back on their use.
Instead, most of us demand that elected officials “do something,” even when the issue involves global fuel supply and demand over which none of us has control. Politicians know that too, so they end up blaming CUC. They always do. And we believe them. So that part is on us.
Scrap the FAC
SO how did the previous FAC “crises” end? Simple. The fuel prices went down. And when they did, all the apocalyptic handwringing promptly ceased, and all the “comprehensive solutions” (renewable energy! privatization! transform CUC into a cooperative! more transparency! more audits!) were forgotten, again.
Today, we challenge the elected officials who keep saying that they feel the ratepayers’ pain to show, don’t tell. Abolish the FAC and pass a law subsidizing CUC’s fuel expenses. CUC said its fuel cost for this month alone could reach $10 million. Tell the suffering ratepayers what your funding source is. Would you impose budget cuts? Which agencies and personnel would be affected? Would you “suspend” the retirees’ 25% benefit? What about the medical referral funding? Scholarships? Who are the unlucky vendors that would not be paid “for a while”? Which taxes would you raise and by how much?
We’re all ears.
Zaldy Dandan is the recipient of the NMI Society of Professional Journalists’ Best in Editorial Writing Award and the NMI Humanities Award for Outstanding Contributions to Journalism. His four books are available on amazon.com/.
