Monday, July 24, 2006

My two cents

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.


Andy said...

Dude, I know this is off topic, but I figured I should tell you someone swiped my Sox cap.
I am so pissed right now! In the American sense!

Anonymous said...

There is an estimated 20-22% loss of electricity from Saipan's CUC. Another way of explaining this loss is that the energy is being stolen. Who is stealing the energy? It should be noted that public buildings: the 3 branches of CNMI government and public schools have not included electricity in their budgets, so in effect...they are not paying for their engery usage. That probably explains why their A/C and lights are left on 27/7. Just and FYI: normal losses of electric companys are around 2%, not 22%.

that guy said...

Hey bro, hows it going? Related to your blog entry. Here's a website showing the national US average perkWh. The mean average is 8.5 cents. Range being 4.95
cents in West Virginia (remember they own most of the US's coal) and 20.81 cents in Hawaii.

Here are some recommendations:

Alternative: Privatize CUC Commonwealth Utility Corporation) to increase overall efficiency. Allowthem to make the decisions related to refurbishing or upgrading the generators. Privatization will not fix problems related to the increasing of fuel prices, but fix only the efficiency of the current operations of the power plant.

Alternative: Lower electric system losses/theft by charging all users, including government. This would have an immediate impact on energy efficiency through waste reduction.

Alternative: Stop subsidizing lower rates. Charge customers at least the actual cost of producing and distributing power. Allow for prices to be variable to adjust for fluctuations in fuel prices. Tiered pricing, with low usage being charged a lower price, would reduce wasteful energy usage.

Alternative: Allow for Net metering or selling excess privately generated power back to the grid.

Alternative: Continue programs that educate consumers on lighting efficiency. Start a program that offers low cost florescent bulbs in exchange for inefficient incandescent ones.

Alternative: Educate consumers on LPG (liquefied petroleum gas) cooking stoves.

Alternative: Educate consumers (residential, hotels, etc.) on solar hot water heaters.

Alternative: Enforce an energy efficiency building code. Educate consumers on benefits of ceiling fans.

Alternative: Look into wind energy but a study the possible effects of typhoon damage.

that guy said...

I forgot to mention....the Fitial admin (tax payers) paid that (don't confuse with "The Economist") consulting firm $100K to come up with the same recommendations....Crazy huh. Just recently there was a firm from New Zealand (I believe a Non-Profit) that came into Saipan and also came up with the same recommendations...not sure why they had to pay $100K to that dude from Oregon.

Missy said...

CUC is not my friend. That being said if we continue to use the same amount every month that seems to be our average (450kwh or less) we will still be in the $100/month or less range. Woohoo! Thank goodness we can live without a/c.

Hope you don't mind I commented about your post on my blog today.