The big story this week is the power rate hike that just took place. The price of electricity just doubled from about 11-14 cents/kilowatt to 24-30 cents/kilowatt (depending on your usage).
I expect our electricity bill to double. The first month we were here, the bill was $100, last month it was $110, and this month it was $120. I expect next month to be in the $250 range (Ouch!).
CUC, the government-owned utility, says that they need to jack up the prices because of the increase in the price of gasoline over the last few years (yes, you read that right, Saipan uses gasoline to produce electricity.) They say that that they weren't even charging enough to cover the cost of the gasoline, never mind the cost of administration, etc. I've also heard rumors of people stealing electricty, much in the same way people steal cable TV.
CUC is having having a hard time making fuel payments. They say that it is because customers keep paying thier bills late. As a result of all this, Saipan has had rolling black outs every day for the last several weeks.
This is what I think:
The rich people on island won't even notice the price hike (Hell, the rich people on island don't even notice the black outs because they all own generators).
The price needs to go up, though. You can't charge less than something costs unless you have identified another source of revenue to subsidize it. I do like the idea of charging more per kilowatt for users that consume more, but I think there is still a lot of room for argument for as to how high the price has to go up.
Unfortunately, I also think that the increase in price will have the short term effect of making things worse. Instead of not paying their bills on time, I predict that people will just not pay their bills.
I guess time will tell.