PACIFIC ISLANDS REPORT

Pacific Islands Development Program/East-West Center
With Support From Center for Pacific Islands Studies/University of Hawai‘i

CNMI GOVERNMENT ‘BROKE,’ CAN’T SUBSIDIZE UTILITY
Suggests raising power rates

By Moneth G. Deposa

SAIPAN, CNMI (Marianas Variety, April 17, 2008) – Governor Benigno R. Fitial yesterday said the administration is broke and can no longer subsidize the fuel purchases of the Commonwealth Utilities Corp., which earlier announced that it will run out of fuel on Friday.

CUC, he added, should consider raising its power rates and cutting costs.

"We don’t have money right now and that’s our challenge…to find money," the governor said.

He said the government has to create savings.

"And the only way to do that is through austerity…by reducing costs," he added.

Fitial said the administration and some agencies have already made "advance payments" to CUC.

"We cannot continue to do that — CUC’s full cost recovery should be factored in its power rate," Fitial said.

Asked about the possible reprogramming of some funds for CUC, Fitial said the government revenues are expected to further decrease in the coming months.

"We don’t have anymore resources to reprogram so it’s going to be a major challenge for us and for CUC," he said. "But CUC can realign its costs and should realize the revenue that they need in order to provide the purchase of needed fuel."

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