When the punch line hits

The Commonwealth Utilities Corp. is a bigger ha-ha than most good jokes about the traveling salesman and the farmer’s daughter, and the latest punch line is that the “cash strapped” utility is, as reported in Wednesday’s Saipan Tribune, about to spend more money on…

…competent financial management? Uh, no…

…much needed maintenance? Er, guess again…

…well, then, how about another bureaucratic job? Bingo!

Indeed, the CUC will be hiring yet another Public Information Officer, since, as we all know, a tiny utility can’t possibly get by with having just one PIO. This is, of course, a stroke of management genius, on the heels, as we all know, of the CUC pleading poverty and trying to hike their rates.

Cost problems? Revenue problems? Hire another PIO! See, it’s simple.

Why the CUC needs one PIO, let alone two, is a matter for a different day. And I’m no gadfly on this note. I’ve been an executive with a U.S. based energy producer that was far bigger and better managed than the circus at CUC, and yet, believe it or not, we managed to get by without a PIO. We had executives who were able to communicate for themselves, but we were motivated by profit, not patronage. Not that we did much communicating to the public (investors, yes, public, no). We were in the business of generating electricity and profits, not generating bureaucratic gibberish and self-indulgent attention.

On the heels of the on-again, off-again rate hike fiasco, and then the PIO hiring story as a punch line, the people of the CNMI had better wake up, smell the coffee, and realize that when the inevitable CUC crisis hits, this is one joke that is going to hit hard.

The business community will be left to impotently complain about energy costs, if, in fact, it can get any energy. Solar won’t do it, unless you can afford to triple your bill and figure out how to make the sun shine at night. Wind energy won’t do it in the Commonwealth, unless you close your business when the wind is below 11 miles per hour. Nuclear won’t do it, since my homemade nuclear fusion experiment was confiscated by the United Nations.

The only thing you can do, then, is to have a standby generator. I haven’t penciled out the total operating costs of industrial-sized generators, but surely our businesses have, and if that cost is coming in at or below 20 cents a kilowatt hour, then it’s easily worth considering in Saipan’s context. This stuff gets a bit complicated, since you’re dealing with capital costs up front and then zig-zagging streams of operating expenses, but to the financial pros out there I’ll mention that you can “levelize” these numbers using discounted cash flow techniques. The levelized cost of energy is the only meaningful benchmark of energy costs, not that my computer’s spell checker recognizes the term, but that’s par for the course, and I won’t bore you any more with this arcane tangent.

Don’t ask me if there is some way to “fix” the CUC. We all know why it does what it does, and why it will never be “fixed,” so that’s not a productive line of discourse. But the business community is going to find itself held economic hostage when the crisis hits. Look on the bright side, though: When you’re sitting in the dark, you’ll have no shortage of “Public Information” to keep you entertained.

And it is entertaining already. Like that evening when a traveling salesman had a flat tire in front of a farmhouse. It was getting dark, as dark as a Saipan blackout, and the salesman decided to ask the farmer if he could spend the night…

(Ed Stephens, Jr. is an economist and columnist for the Saipan Tribune. Ed4Saipan@yahoo.com)