In the aftermath of environmental, financial, and political disturbances, the Northern Mariana Islands’ Commonwealth Utilities Corporation (CUC) is being rocked by a number of simultaneous crises.
The CUC is the state-owned and administered energy company for the Northern Mariana Islands. It provides electricity, water, and wastewater disposal services to the islands. But its ability to do that is under threat at the moment.
The first of the CUC’s problems is environmental. The Northern Marianas are frequently vulnerable to earthquakes, which damage water lines and cause leakages. For the CUC, that means much of the water the company produces doesn’t make it to citizens. This October, only 90 million gallons of 250 million produced–that’s 36%–actually made it to consumers. As a result, a majority of the water produced was wasted, causing unnecessary expenses for the company. According to a CUC water director, the leakages coincided with the islands’ most damaging earthquakes. Although these earthquakes may be damaging, they are not new to the Northern Mariana Islands, and the commonwealth is well-prepared to deal with them.
The second problem, however, is more unique. According to recent audits, the CUC posted a loss of $15 million in 2021. The audits often follow a few years after the financial year, so these are the most recently available audits, but they do not paint a positive picture. Since the CUC is state-run and provides services to the public, it is not necessarily supposed to post a profit each year. However, 2021’s loss of $15 million is a stark contrast to 2020, where it had a profit of nearly $500,000.
These financial troubles have become entangled with political ones. On December 12, the Northern Mariana Islands House of Representatives subpoenaed the CUC to release financial disclosures. In the past, courts have mandated that the CUC have discrete funds for emergencies and maintenance, as well as separate accounts for general funds and securities. Representative Vincent Aldan (I), however, was worried that the CUC had been irresponsibly co-mingling these funds. The CUC will have until December 22nd to respond to the House’s subpoena and prove that they have separated their accounts properly.
Northern Mariana residents and municipal officials alike have become convinced that their CUC fees are expensive and difficult to pay. Representative Roman Benavente (R) said that CUC bills were exorbitant and pointed to the Levelized Energy Adjustment Charge, a specific surcharge that he could not discern the origin or purpose of. At the same time, Milissa Mendiola, the Resident Financial Director of Tinian, one of the three principal islands, made a request to the government of the entire Northern Mariana Islands to help cover Tinian’s utility expenses. Mendiola said that due to financial austerity measures from Governor Arnold Palacios (I), Tinian would not be able to pay its utility meter account. She asked the central government to cover it lest the entire island lose power on January 8, 2024.
These challenges are not insurmountable, but the confluence of environmental, financial, and political crises certainly threatens the CUC. How the CUC will deal with these challenges will be revealed in the coming months.