Food For Thought 7-11-08
Hi friends, this is Harry Blalock; General Manager for radio stations KZMI & KCNM. It’s that time once again to take a look at the issues of the week, and to offer some Food For Thought.
For several weeks now, I’ve been hearing from several different sources that our government, specifically the administration is slowly coming to the realization that the problems at Commonwealth Utilities Corporation are far beyond anything they can cope with or solve. They are realizing that for far too long we had political appointees running and managing the corporation that really didn’t have the required background, expertise or experience to do the job properly. And then we had the interference from politicians who had their own plans and designs on the future of the power plant and refused to spend any money on maintenance for the engines and generators because they were just going to privatize it anyway. The money kept in surplus to order spare parts and fuel was quickly squandered and wasted. Then we had a bunch of pandering politicians seeking desperately to hold onto their jobs artificially lower the rate that CUC had to charge to residential customers, charging far less even than the fuel costs to produce the electricity, not to mention all of the other associated costs. Then this administration learned that they had been led astray and told that the repairs would be completed much sooner than was feasible or realistic. So now they had engines and generators that were breaking down on a daily basis, parts that had not been ordered yet that were needed for overhauls of the engines, no end in sight of the rolling blackouts, and they were continually unable to pay for adequate fuel shipments to run the generators for the next month.
When you find yourself in the middle of a situation like this, it severely limits your options. You realize that continuing to depend on fossil fuels to produce your electricity will not be sustainable much longer, yet you have no money to invest in alternative energy sources. So do you continue throwing millions of dollars into the old, inefficient generators we have? Do you invest in new generators that will continue to burn expensive diesel fuel that you know you won’t be able to afford to pay for, and that will drive the cost of electricity so high that no one will be able to afford to live here any longer? Or do you eventually come to the realization that the problems have spiraled out of control to the point that there is no possible way you can begin to address all the issues and come up with a workable solution? Do you finally have to start discussing the “B” word? And can you discuss the “B” word since the utility is owned by the government, without admitting that the entire government is also teetering on the verge of the “B” word as well? The “B” word in case you are wondering, is Bankruptcy.
I have heard from several different people in the last few weeks that the administration is getting closer and closer to the conclusion that bankruptcy might be the only viable option they have left, and that it has been discussed extensively. Could that also be the reason that the administration placed an accountant in charge of the failing utility company instead of a power plant operations manager or engineer? Was his sole objective to get the financial books organized enough to be able to formally declare bankruptcy? When I had Tony Muna on my talk show last week, I came right out and asked him whether the administration has been considering declaring bankruptcy for CUC. He was reluctant to answer the question at first, and wanted to point out all the things the administration has tried to do to avoid this. He blamed the Retirement Fund for not being willing to give CUC the loan a couple years ago, then he blamed the legislature for lowering the rate the utility had to charge to residential customers. Yes, we all know there is plenty of blame to go around, but the question I asked was whether the administration has been discussing putting CUC into bankruptcy. After dancing around the issue for the better part of a half hour, Tony finally came out and said yes, the administration has been discussing the viability of declaring bankruptcy for CUC. He was careful to point out that it was not the course of action that had been definitely decided at this point yet, but it was certainly one of the options that were being considered.
But the mere fact that bankruptcy is even being considered for CUC brings up a whole host of other questions. If the administration, who is in effect running CUC at the moment, declares the utility is bankrupt, where does it go from there? Do they march into Judge Munson’s federal courtroom and say, here you go, we don’t know what to do with it anymore or how to solve the problems? Would Judge Munson have the authority to appoint a receiver to oversee the operations of CUC from that point forward? Who would then be responsible for paying for future fuel shipments? Would a receiver have the authority to take bids and privative the utility company? If the utility company were under the direction of a federally appointed receiver, would that mean that they could tap into federal funds to bring in alternative energy producing plants, whether wind, wave, solar or deep cold water ocean thermal energy conversion?
I think the administration has finally realized that just going to the federal government asking for financial help while continuing to have a dysfunctional, corrupt, inefficient and malfunctioning system in place to operate the utility company isn’t going to work. We’ve tried that before, and the federal government is tired of throwing good money after bad. I think they are going to want to see some real reforms and changes before they bail us out again. They are going to want to be sure we don’t find ourselves right back in the same position in another 10 years. And they should put some very strict demands on any help they wind up giving us, as we haven’t always been known to honor our previous agreements.
But should the receivership stop with just the utility company? What about Commonwealth Health Center? It has been swimming in a sea of red ink for more years than I can count. Their billing department there is a complete joke and they can’t seem to keep the staff or equipment they need. Could a federally appointed receiver straighten out their messes as well and get them on the path to being a professionally run and operated hospital?
And what about our Retirement Fund? Will they be financially solvent 10 years from now? Will retirees actually be receiving their checks? But is that really the Retirement Fund’s fault, or is it the fault of the government who isn’t paying the proper contributions to the Retirement Fund? And if the government isn’t paying all their obligations and doesn’t have enough money to meet all their financial obligations, should they be placed under receivership as well? After all, what is the definition of bankruptcy? Isn’t it when your liabilities exceed your income and your assets and you have no way of generating enough income to pay for all your liabilities? If that is the definition of bankruptcy, I’d say our local government has been operating in bankruptcy for several years now, or not operating as the case may be. It wouldn’t be the first time that a government was bankrupt and placed into receivership. It happened to Orange County, California several years ago. And while you may say, but wait, that was only a county government, not something like the Commonwealth government, you need to realize that the population of Orange county is far, far higher than that of the CNMI, and the scale of everything was that much bigger as well.
There are those that would say the federal government has no business intruding into our affairs, and they should only be there to give us money and nothing more. We have the right of self-governance and the right to choose our own leaders and then watch them run things straight into the ground. That may be true, but then the federal government also has the right to say no to our continued requests for funding to bail us out of whatever the current mess is. I’m sure they are getting tired of watching the same scenarios play out over and over out here, while we never seem to learn any lessons from it, or hold any of those who got us in these messes responsible. Honestly the federal government would have to be insane to offer us any financial assistance. The definition of insanity is doing the same thing, in the same situation over and over and expecting different results each time. The federal government knows our track record and has watched us repeat the same mistakes over and over again. If they were to give us money again without requiring some drastic changes, they would fit the definition of insanity.
We just keep electing the same ones who got us into these problems right back into office, which is why our last governor actually thinks he has a chance and is planning on running to be governor again in the next election. He’s counting on the fact that you’ll forget he kept claiming things were pretty darn good when he was in the process of destroying CUC and letting our economy quickly flush down the toilet. He’s hoping that you won’t put 2 and 2 together and realize that he’s a big part of the reason we are in the messes we are in right now. If insanity is doing the same thing over and over again expecting different results, then what would voting for any politician once again who you’ve already given a chance to and who has failed you be?
Yes, we have fewer and fewer options available to us these days, and maybe that’s what it’s going to take to finally effect any real and meaningful change. The “B” word may be closer than you think, or at least finally admitting that is where we are, and have been.
Food For Thought is now available online at www.fftsaipan.blogspot.com and if you want it by e-mail distribution please send me an e-mail at harryblalock@gmail.com
I’m Harry Blalock, thanking you once again for giving me a generous slice of your valuable time, and allowing me to share my Food For Thought.
Showing posts with label Commonwealth Utilities Corporation. Show all posts
Showing posts with label Commonwealth Utilities Corporation. Show all posts
Friday, July 11, 2008
Friday, June 20, 2008
State of Disaster at CUC
Food For Thought 6-20-08
Hi friends, this is Harry Blalock; General Manager for radio stations KZMI & KCNM. It’s that time once again to take a look at the issues of the week, and to offer some Food For Thought.
How much is too much? At what point will you finally be at your breaking point and admit that our system has failed us miserably and just continues to perpetuate itself? Our utility company is sinking to new all time lows, even though they keep trying to tell us that we’re almost at the end of rolling blackouts. I think it’s clearer than ever that they really just don’t have a clue. A group of over 200 people met this past week because they are sick and tired of what is going on at Commonwealth Utilities Corporation. They are demanding action, demanding that the legislature take their jobs seriously and provide real oversight over the government owned utility. They are also demanding that we finally break down and actually hire a professional who has the skills, education and experience to actually properly and effectively run a utility company. These seem like pretty reasonable demands to me.
And yet our Governor continues to beg the federal government for money to fix our worn out and poorly maintained generators. The real question is, why would anyone in the federal government want to listen to anything he has to say? After all, isn’t it our own fault that our generators were not maintained and were left to just fall apart believing that a sweetheart privatization deal was just around the corner? Isn’t it our fault that we continue to put political appointees in charge of running and charting the course for this very technical corporation? Isn’t it our fault that in spite of gross negligence, mismanagement and corruption we still haven’t seen any of the people ultimately responsible for the mess put behind bars or held responsible?
Is the federal government supposed to just ignore the fact that our Governor has done nothing but fight them at every turn recently with regards to the minimum wage increases and the federalization of our immigration system, and now that it has all passed and been signed into law, he is threatening to sue the federal government and drag the whole mess into court? Are they just supposed to pretend that none of that has happened and throw more money at our messes, believing that we will actually use the money properly this time and not squander and waste it? I’m afraid our track record wouldn’t give them much reason to trust us or believe that we would actually do it right this time.
Has our government given the federal government any reason to believe that we can really properly manage our own affairs and that we’ll be responsible this time around? Do you recall the whole mess with Marianas Public Lands Authority? Do you remember how much money was squandered through frivolous travel by their board members and the exorbitant per diem fees they voted to give themselves? Do you remember how a certain lawyer that was hired by MPLA wound up cashing checks that were supposed to go to MPLA, but somehow wound up going to him personally? Have you ever seen charges brought against any of them? It’s been 2 ½ years, does this administration really expect us to believe they can’t build a case in that much time? And now one of our senators is actually recommending that the Governor appoint this same lawyer with the questionable background at MPLA to serve as a judge?
Our leaders have made us the punch line to a bad joke; they have made us a laughingstock because of their rampant greed, corruption, mismanagement and nepotism. We have come to just think of this as the way things are; sadly we don’t expect anything else from them because it’s all we’ve ever experienced. But now the chickens are finally coming home to roost, each and every one of us are paying for their incompetence through outrageous electricity costs and frequent power outages. Families are getting sick of it and are leaving the islands for good. Businesses can no longer survive because of the double whammy from CUC, exorbitant utility costs and unreliable power.
If you added up the total amount of destroyed equipment as a result of the rolling blackouts and brownouts, I’m sure the figure would be astronomical. I have heard people talk about the possibility of a class action lawsuit against the government and CUC for all the losses they have incurred as a result of the failure to provide constant, reliable power. Frankly, it’s probably long overdue. Something has got to give and wake our leaders up, they need to realize that they are responsible for the mess we are in, and they need to do something about it. We either need to get serious about privatizing the utility company, but doing it right this time, or we need to hire experienced professionals with a proven track record to run and manage our utility company who can get it back on track and stop wasting over 60% of the fuel they put into the engines.
I’ve heard Tony Muna tell us over and over that he is only basing the rates CUC is charging us on “cost recovery”, but the problem is the costs are far higher than they need to be because of mismanagement within the power company. We are currently burning 60% more fuel than we need to be because our engines and generators are inefficient and not working properly. When you figure out how much all that wasted fuel is costing us, you all the sudden realize we could probably buy new generators and completely pay for them in a fairly short amount of time if you applied the money used to pay for all that wasted fuel. But instead of doing that, we just continue the band-aid approach and try repairing and patching up the old engines and just dealing with their inefficiencies. Hiring an experienced Executive Director and then having him come up with a cost effective plan would get us away from this never ending destructive cycle, but we keep avoiding that. Instead the Governor appoints an accountant as Executive Director of the utility company, someone with absolutely no experience or expertise in power management or systems. Sure he can crunch the numbers, but does he have the background and experience to show us how to stop wasting so much money on inefficient engines? What is he doing about the 25% line losses we continue to experience? That means that 25% of the electricity being produced is not being run through any meters, it’s just disappearing. But it is being paid for; you and I are being forced to pay for these losses. Our utility company isn’t just recovering costs, they are in squandering mode, and they’re turning it into an art form.
What if the federal government came in right now and said they would be willing to give us money to buy new generators which would be efficient, and would lower the cost we’re currently paying for electricity, but the catch was that they would hire and place the people here to run the corporation. Do you have more confidence in our own politicians to actually fix the mess properly, or do you think the federal government might be a little more reliable in this regard? I don’t know of any offers from the federal government in this regard, I was just wondering whether our leaders would still get your vote of confidence, or whether you’ve had about enough of their lies and empty promises.
While CUC continues with their load shedding schedule and frequent breakdown occurrences that aren’t scheduled, there may be some times that our radio stations will be off the air in the evening hours as a result. Because of the rolling blackouts and brownouts, we have had several automatic transfer switches burn out at our generator location on Mt. Tapochou. The cost to replace it is about $3,000, but since we can’t count on CUC to not repeat the same problem that burned the last switch out last time, we can’t afford to just keep replacing it. That means that every time there is a power outage on Mt. Tapochou, one of us has to drive up there and manually start the generator and switch power over. Then when CUC restores power we have to drive back up again, turn the generator off and switch power back. Some days recently we have had to make the trip up and down as many as 6 times in one day. We will continue making the trips during the day, but we cannot continue driving up at night, not knowing how long the outage will last or when CUC will finally bring island power back.
We are sorry for any inconvenience this might cause, however I believe you can understand that we also have to limit the amount of time we spend driving up and down Mt. Tapochou because of CUC. Many businesses have had to cut back on their hours, some have had to close periodically, and others are now assessing whether they can even afford to continue doing business in the CNMI as a result of our power situation. This situation could have been avoided if the administration and management of CUC had brought in auxiliary generators to help make up for the lack of capacity while repairs were ongoing, but they didn’t. They didn’t care about the effect it would have on you, on businesses or on the quality of life in general. And now they are telling us they are just recovering costs when they charge us the highest electricity rates around, even though they waste 60% of their fuel, and they lose 25% of their electricity through line losses. They may be recovering their costs, but the problem is their costs are absurd because of the waste and mismanagement taking place. Are you willing to keep buying the line of crap they’re feeding you, or have you had enough? Honestly I don’t know what the fix to this problem is going to be, but I do know that those responsible for this mess need to be held accountable and never given the chance to do it to us again.
Food For Thought is now available online at www.fftsaipan.blogspot.com and if you want it by e-mail distribution please send me an e-mail at harryblalock@gmail.com
I’m Harry Blalock, thanking you once again for giving me a generous slice of your valuable time, and allowing me to share my Food For Thought.
Hi friends, this is Harry Blalock; General Manager for radio stations KZMI & KCNM. It’s that time once again to take a look at the issues of the week, and to offer some Food For Thought.
How much is too much? At what point will you finally be at your breaking point and admit that our system has failed us miserably and just continues to perpetuate itself? Our utility company is sinking to new all time lows, even though they keep trying to tell us that we’re almost at the end of rolling blackouts. I think it’s clearer than ever that they really just don’t have a clue. A group of over 200 people met this past week because they are sick and tired of what is going on at Commonwealth Utilities Corporation. They are demanding action, demanding that the legislature take their jobs seriously and provide real oversight over the government owned utility. They are also demanding that we finally break down and actually hire a professional who has the skills, education and experience to actually properly and effectively run a utility company. These seem like pretty reasonable demands to me.
And yet our Governor continues to beg the federal government for money to fix our worn out and poorly maintained generators. The real question is, why would anyone in the federal government want to listen to anything he has to say? After all, isn’t it our own fault that our generators were not maintained and were left to just fall apart believing that a sweetheart privatization deal was just around the corner? Isn’t it our fault that we continue to put political appointees in charge of running and charting the course for this very technical corporation? Isn’t it our fault that in spite of gross negligence, mismanagement and corruption we still haven’t seen any of the people ultimately responsible for the mess put behind bars or held responsible?
Is the federal government supposed to just ignore the fact that our Governor has done nothing but fight them at every turn recently with regards to the minimum wage increases and the federalization of our immigration system, and now that it has all passed and been signed into law, he is threatening to sue the federal government and drag the whole mess into court? Are they just supposed to pretend that none of that has happened and throw more money at our messes, believing that we will actually use the money properly this time and not squander and waste it? I’m afraid our track record wouldn’t give them much reason to trust us or believe that we would actually do it right this time.
Has our government given the federal government any reason to believe that we can really properly manage our own affairs and that we’ll be responsible this time around? Do you recall the whole mess with Marianas Public Lands Authority? Do you remember how much money was squandered through frivolous travel by their board members and the exorbitant per diem fees they voted to give themselves? Do you remember how a certain lawyer that was hired by MPLA wound up cashing checks that were supposed to go to MPLA, but somehow wound up going to him personally? Have you ever seen charges brought against any of them? It’s been 2 ½ years, does this administration really expect us to believe they can’t build a case in that much time? And now one of our senators is actually recommending that the Governor appoint this same lawyer with the questionable background at MPLA to serve as a judge?
Our leaders have made us the punch line to a bad joke; they have made us a laughingstock because of their rampant greed, corruption, mismanagement and nepotism. We have come to just think of this as the way things are; sadly we don’t expect anything else from them because it’s all we’ve ever experienced. But now the chickens are finally coming home to roost, each and every one of us are paying for their incompetence through outrageous electricity costs and frequent power outages. Families are getting sick of it and are leaving the islands for good. Businesses can no longer survive because of the double whammy from CUC, exorbitant utility costs and unreliable power.
If you added up the total amount of destroyed equipment as a result of the rolling blackouts and brownouts, I’m sure the figure would be astronomical. I have heard people talk about the possibility of a class action lawsuit against the government and CUC for all the losses they have incurred as a result of the failure to provide constant, reliable power. Frankly, it’s probably long overdue. Something has got to give and wake our leaders up, they need to realize that they are responsible for the mess we are in, and they need to do something about it. We either need to get serious about privatizing the utility company, but doing it right this time, or we need to hire experienced professionals with a proven track record to run and manage our utility company who can get it back on track and stop wasting over 60% of the fuel they put into the engines.
I’ve heard Tony Muna tell us over and over that he is only basing the rates CUC is charging us on “cost recovery”, but the problem is the costs are far higher than they need to be because of mismanagement within the power company. We are currently burning 60% more fuel than we need to be because our engines and generators are inefficient and not working properly. When you figure out how much all that wasted fuel is costing us, you all the sudden realize we could probably buy new generators and completely pay for them in a fairly short amount of time if you applied the money used to pay for all that wasted fuel. But instead of doing that, we just continue the band-aid approach and try repairing and patching up the old engines and just dealing with their inefficiencies. Hiring an experienced Executive Director and then having him come up with a cost effective plan would get us away from this never ending destructive cycle, but we keep avoiding that. Instead the Governor appoints an accountant as Executive Director of the utility company, someone with absolutely no experience or expertise in power management or systems. Sure he can crunch the numbers, but does he have the background and experience to show us how to stop wasting so much money on inefficient engines? What is he doing about the 25% line losses we continue to experience? That means that 25% of the electricity being produced is not being run through any meters, it’s just disappearing. But it is being paid for; you and I are being forced to pay for these losses. Our utility company isn’t just recovering costs, they are in squandering mode, and they’re turning it into an art form.
What if the federal government came in right now and said they would be willing to give us money to buy new generators which would be efficient, and would lower the cost we’re currently paying for electricity, but the catch was that they would hire and place the people here to run the corporation. Do you have more confidence in our own politicians to actually fix the mess properly, or do you think the federal government might be a little more reliable in this regard? I don’t know of any offers from the federal government in this regard, I was just wondering whether our leaders would still get your vote of confidence, or whether you’ve had about enough of their lies and empty promises.
While CUC continues with their load shedding schedule and frequent breakdown occurrences that aren’t scheduled, there may be some times that our radio stations will be off the air in the evening hours as a result. Because of the rolling blackouts and brownouts, we have had several automatic transfer switches burn out at our generator location on Mt. Tapochou. The cost to replace it is about $3,000, but since we can’t count on CUC to not repeat the same problem that burned the last switch out last time, we can’t afford to just keep replacing it. That means that every time there is a power outage on Mt. Tapochou, one of us has to drive up there and manually start the generator and switch power over. Then when CUC restores power we have to drive back up again, turn the generator off and switch power back. Some days recently we have had to make the trip up and down as many as 6 times in one day. We will continue making the trips during the day, but we cannot continue driving up at night, not knowing how long the outage will last or when CUC will finally bring island power back.
We are sorry for any inconvenience this might cause, however I believe you can understand that we also have to limit the amount of time we spend driving up and down Mt. Tapochou because of CUC. Many businesses have had to cut back on their hours, some have had to close periodically, and others are now assessing whether they can even afford to continue doing business in the CNMI as a result of our power situation. This situation could have been avoided if the administration and management of CUC had brought in auxiliary generators to help make up for the lack of capacity while repairs were ongoing, but they didn’t. They didn’t care about the effect it would have on you, on businesses or on the quality of life in general. And now they are telling us they are just recovering costs when they charge us the highest electricity rates around, even though they waste 60% of their fuel, and they lose 25% of their electricity through line losses. They may be recovering their costs, but the problem is their costs are absurd because of the waste and mismanagement taking place. Are you willing to keep buying the line of crap they’re feeding you, or have you had enough? Honestly I don’t know what the fix to this problem is going to be, but I do know that those responsible for this mess need to be held accountable and never given the chance to do it to us again.
Food For Thought is now available online at www.fftsaipan.blogspot.com and if you want it by e-mail distribution please send me an e-mail at harryblalock@gmail.com
I’m Harry Blalock, thanking you once again for giving me a generous slice of your valuable time, and allowing me to share my Food For Thought.
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