PACIFIC ISLANDS REPORT

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

By Ed Stephens, Jr.

SAIPAN, CNMI (Saipan Tribune, May 4) – The latest Commonwealth Utilities Corp prices made coffee shoot out of my nose when I read about them. And I wasn’t even drinking coffee at the time. Whooie, this stuff is off the chart.

According to Wednesday’s Saipan Tribune, "Residential customers will be assessed 23.8 cents for the first 500 kilowatt-hours; 28.8 cents for the next 500 kilowatt-hours; 30.8 cents for the succeeding 1,000 kilowatt-hours; and 34.9 cents for each kilowatt-hour consumed in excess of 2,000 kilowatt-hours."

I cannot fathom a Saipan house that uses less than 1,500 kilowatt-hours of electricity per month. The same Wednesday article cites the Commonwealth Utilities Corp’s claim that "most" residential customers use under 1,000 kilowatt-hours per month. Well, they’ve got their numbers, and I don’t have their numbers, and maybe not every house is an un-insulated concrete sweat box, but just about every one I’ve seen is. Anyway, I’ll arbitrarily pick 1,500 kilowatt-hours as a "typical" case for a house.

Whereupon I come up with a bill of, egads, US$417 a month. Grade school teachers can assign this as a word problem in math class, but we’ll peek at the answer here and come up with an average cost per kilowatt-hours of US27.8 cents in this scenario.

If you are so inclined, you can compare costs here to costs anyplace else. Guam, the Cayman Islands, Tahiti, Bermuda, it’s all up to you. But since I have the U.S. overall averages on my desk, I am going to ruin everyone’s day by introducing them, since they are a baseline, X-axis extreme.

In the U.S., juice per kilowatt-hours is US10.05 cents for residential, US9.11 cents for commercial, and US6.12 cents for industrial. The overall average, covering all of this, is US8.72 cents. These are January figures.

Yes, it’s a bit of apples-to-oranges, since, among other imperfections, I’m talking January (U.S) versus May (CNMI). So go ahead and refine things to your taste, I’m running with the data I have at hand.

Anyway, using these raw numbers, and confining ourselves to the residential end of things, the Commonwealth Utilities Corp price per kilowatt-hours is fully 177 percent higher than the U.S. price.

But here’s a weird, and very happy, twist on things. Looking elsewhere at the energy situation, this time at the private sector, the CNMI’s gasoline price is just 13 percent higher than the U.S. average. Cazart! I get that by looking at some Saipan Mobil prices for unleaded (at US$3.369 per gallon) yesterday versus the reported U.S. average for Monday (US$2.971 per gallon).

So, electricity—177 percent higher versus the U.S.; gasoline—13 percent higher versus the U.S.

I figure that electricity and gasoline are the two biggest household energy expenses, so, well, there you go.

Folding it all together, assuming you burn 50 gallons of gasoline a month, which isn’t all that much (1,000 miles at 20 miles per gallon), your fuel cost is US$168. Add this to our theoretical 1,500 kilowatt-hours of electricity use (US$417), and we come up with a total energy bill of US$585 per month.

I really shouldn’t do this to you, but I can’t help it: If you could cut this energy cost in half, thus saving US$292.50 every month, and if you could earn a measly 6 percent on that savings, in 30 years you’d have well over a quarter million dollars amassed; that’s US$293,821 to be precise.

For some reason, that last figure is depressing me. I was trying to torment you with the calculation, and the whole thing boomeranged.

So, never mind. Forget I said anything. I’m not going to think about energy costs any more. This stuff really adds up. Leave me alone.

[Ed Stephens Jr. is an economist and columnist for the Saipan Tribune. His column runs every Friday.]

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