My two-cents worth on healing CUC

Someone has defined “insanity” as doing the same thing over and over again and expecting to get a different result. This brings to mind what we have been doing at the CUC. For over 25 years, we have been trying to improve our utility system repeatedly by making the same mistakes over and over again. The problem has been talked to death with all the suggestions made, but no one has really explored where the real problem lies. So today here are my two cents worth of comments on how to resolve the CUC problem.

Since the CUC has been so badly mismanaged over the past 25 years by all its changes in administration and executive directors, there can only be one conclusion: We are incapable of operating a utility plant! Come on, after 25 years and we cannot run a small power plant! The truth is that we are not capable, and never will be, of successfully running the CUC! Why not? We can discuss this issue later because the same reasons also apply to other government-run operations.

Therefore there is only one way left that this whole mess and fiasco can be corrected. And that is to completely scrap the whole system and start anew. Patchwork, Scotch tape and politics will not put CUC back together again. We need drastic action. Are we ready for it?

We must award the utility plant operation in its entirety to an outside group. We must select an outside company who is willing and capable of doing all the following operations:

[B]1. This company will replace all the generators with new ones. [/B]What we have now are outdated and have been badly misused. Regardless of repairs, they will never operate as new ones and will continue to require costly repairs. Their life span is over!

[B]2. This company will supply its own fuel to run the generators.[/B] Let the new operator find his own source of fuel, whether it is from Indonesia, Philippines, Russia, or any supplier. It will seek the best price because it is to its benefit to keep its costs low. Also it knows the best quality of fuel to use for its own generators.

[B]3. This company will distribute the electricity through the grid and control its flow.[/B] It will repair also all the lines, transformers, poles, and all other equipment needed to keep the flow of power constant. This includes the trucks and other equipment needed to back up the system.

[B]4. This company will bill all customers and will collect all money from the use of power. [/B]It will set its own policy for the administrative side of the business.

[B]5. This company and the government will organize a joint board of directors composed of qualified people who understand operations of a power plant.[/B] At the start there must be complete mutual trust and faith in each party. The new company who takes over the operation of the power plant will lay out its objectives to the board, showing its investment amount and its expected return on it over how many years. In other words it will be a transparent operation. Both side must appreciate and understand the other side’s responsibilities and goals. Trust is the key word here.

[B]6. All current employees will be tested to prove their ability to do their job.[/B] Those that fail will be retrained. If they fail training, they will be dismissed and replaced by new employees. There will be no coddling of lazy or incompetent employees.

[B]7. This company will be given full authority and responsibility to produce electric power without interference from the government.[/B] If it has to keep asking: “May I do this? May I do that?” It will fail in its efforts. All the government and legislators should do is enjoy the electricity and air conditioning in their offices. Hands off!

Basically unless a new company totally takes over the operation of the power plant, RFPs and other negotiations will never fix up our problem. We have too many personal interests that conflict. The CNMI consists of an extended family and that is its major problem. We have been doing the same thing for over 25 years. To continue so is insanity. New results will never happen unless new approaches are taken.

All plans we make always change with new administrations. So it has been with the CUC operation. We need a stable operator that does not change with new administrations. Plans take years of doing and growing. Only the same operators over the years, not beholden to government interference, can provide that stability and reliability of performance.

Let me cite a personal example of a government joint venture that resulted in a disaster because of government interference. If you recall back in 1995, an investor named MRC built a marina in the Outer Cove. The government and it had a joint partnership. They had agreed what each of them would perform written in a lease and contract. It was also agreed that after the 15-year lease, MRC would donate the marina to the people as a gift.

After the operation began, the expected users began to find reasons why they didn’t want to dock their boats in the marina. They even accused MRC of building an unsafe marina which was proven untrue in court. The government—MRC’s partner—instead of siding with MRC and advising MRC, took the side of the boat owners.

Even at an oversight hearing in the Senate, no fault was proven on MRC’s part. Despite that, the government refused to implement certain clauses in the contract to which they had previously agreed. As a result of non-assistance by MRC’s partner—the government—the marina project failed.

What should be made clear is that the original administration and MRC had no problems with what they agreed on. However, when a new administration was voted into power, that’s when all the problems arose. The new administration, eager to placate its voters, turned against MRC and refused to uphold the terms and conditions agreed to by the previous administration. This is a classic example of the failure to honor previous agreements and the failure to mutually respect the partner when administrations change.

Today, only the National Park Service operates the hard land. The local government who is supposed to operate the marina is doing nothing. Meanwhile MRC has lost all its investment because it trusted in the government. As a result the government and MRC are in litigation. It has not only created a debt of millions of dollars to the CNMI, but the loss of a first-class marina which was to be given free to the CNMI people at the end of the lease term. Sad to say, in a few years it will revert back to what it looked like in 1994, unless someone who cares starts to take care of it. Partnership with the government is like a kiss of death.

This is exactly what will happen if the government and an outside investor try to operate the CUC together. The new company must have full right to operate it on a professional level. The government must stand on the sidelines and let the operator do its job with minimum interference.

To many, this idea may sound ridiculous, stupid and impossible. It goes against the grain of what we think about ourselves. Some of us really don’t get it yet. Until we stop thinking that we know better than anybody else, we will always keep failing. A wise person is one who knows that he does not know. Then he finds someone who knows and becomes wise because of it.

After the initial shock of my proposal settles down, think about it, debate it. I firmly believe there is no other way. We have made too many mistakes, have had too much bad management, wasted millions of dollars, and have given too much suffering to the people over the years.

We cannot solve the CUC situation by trying to operate it ourselves. We must make a complete change. Bandages don’t work anymore. We have failed. Yet we have everything to gain by considering my two-cents worth of comments for healing the CUC. Let’s swallow our hollow pride and seriously consider my suggestion.

Give the complete operation of the CUC to an outside firm. Thousands of private utility companies are successfully operating in thousands of municipalities across the United States. Why can’t we? Think about it. Insanity is doing the same thing over and over and expecting different results.

P.S. I would love to hear someone else’s comments on this concept. Is it a crazy idea or the only way to settle the CUC dilemma?