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‘Surcharge repeal a mistake’
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Posted on Jul 19 2005
Power privatization consultant Dennis Swann calls the Legislature’s attempt to repeal the fuel surcharge in the CNMI “a terrible mistake.”
“It’s a disaster. It’s a terrible mistake to [do] away with [the] fuel surcharge,” Swann said in an interview yesterday.
Swann, who has been making a series of presentations on the power privatization to government officials and business leaders, said that the surcharge is a practical way of recovering some costs to meet fuel needs.
“Where would you get the money? Repeal of the surcharge is a loss of 3 cents per kilowatt-hour. The only other place to source that is the government,” said Swann, who met yesterday with officials of the Saipan Chamber of Commerce, Hotel Association of the NMI, and tourism industry representatives at the Governor’s Office.
Gov. Juan N. Babauta said the issue boils down to a choice between paying the fuel surcharge, which he said is necessary amid increases in fuel prices, and facing blackouts. He warned that removing it without an alternative would mean the collapse of the local economy.
Babauta, who is currently in charge of CUC following his May 19 declaration of emergency, said that if the Legislature is serious in ending the fuel surcharge as contained in House Bill 14-343, it can appropriate some $31 million to let CUC buy fuel to run the power plants in the next 15 months, about $20 million to pay CUC debts, and funds for government utilities.
He said the fuel surcharge gives CUC $1.4 million a month, which is still $1 million short of CUC’s fuel needs.
Meantime, the House leadership said the current problem reflects the Babauta’s “mismanagement in the past three and a half years.” It said that the governor, as chief executive, has the authority to reprogram funds to resolve the matter.
