Saturday, October 13, 2007

Sour Grapes for Tuesday, October 9th


Fire me up

Utility Rate scam
The recent passage, veto and override of the as yet unnumbered law capping residential utility rates at 17 cents per kilowatt hour will come back to haunt us and very soon. If you are deceived into believing that your lawmakers have done you a favor, it won’t take long for you to figure out the truth.

The 8 Million dollar shortfall that this will create will have to be taken care of in one of two ways. Either shut off the power in rolling blackouts (you remember how much fun that was, right?), or charge government (which doesn’t pay anyway) and businesses the difference. Since government doesn’t pay most of the time that leaves charging the 8 Million loss to business. Fine you say, they can afford it and I can’t. Sorry to disillusion you but YOU will be doing the paying and it will cost you even more than before. If these charges are passed on to businesses they will have to pass them on to their customers plus some. Every time you buy something you will be paying that power rate increase plus a hefty margin. You will pay out more in higher prices than you were paying for the power rate to begin with. It is a lose/lose/lose proposition.

Lets look at an example: If your power bill is now about $200 per month you will save roughly $60 per month but the cost of goods and services you have to buy to survive will be going up by much more than that. A medium sized grocery has a power bill of $10,000 or more now and that will be going up by the same 30% that your residential bill goes down. So that $3000 extra plus a margin will mean that grocery store will be charging you much more for all your groceries. To net an extra $3000 at the very slim margins a grocery operates on they will have to generate nearly $100,000 more in revenue. I repeat, they will have to make one hundred thousand more gross revenue to net that extra three thousand profit so they can pay the higher power bill. YOU will have to pay for it.

That is just groceries, what about all the other things and services you must buy each month? I project you will be paying at least double and possibly triple the $60 you saved. So bottom line, you will be spending about $150 extra per month in order to “save” $60. You lose, I lose, all businesses lose. Only the government wins as it sucks extra gross revenue tax from the businesses that have to charge more to survive. Thanks Legislature, we really appreciate it. Remember that long term you too will lose as pushing the rate increase onto them, some of those businesses will close down causing a reduction in taxes instead of an increase. By then it will be too late, the harm will have been done.
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Surprising
I read with astonishment an article last week in which the author claims that the boost provided by a vibrant new industry, poised on the brink of revitalizing our way of life here is ‘not worth the money’ because social problems may arise from it.

We are already experiencing huge social problems as people, businesses and the government go broke and large portions of the population leave the island because our sources of income are drying up. Any social problems generated by casino gaming would be small in comparison to the deterioration we see around us every day. Any social problems would be more than offset by the removal of the Poker rooms from our neighborhoods, and hundreds of private sector jobs being created. Many more people would gain than might possibly be harmed.

It is understandable that those who own competing businesses (poker rooms and Tinian casino operators) would want to maintain their respective monopolies and would pour some funds into the ‘no’ campaign. It is understandable that those who are on the receiving end of those funds would be happy to do their bidding, for a price. It is more puzzling why others with little to lose and the possibility of a whole new era of prosperity to gain would be so vocal in their opposition.

Those who are already ‘set’ monetarily and those who fear change seem to be the primary opponents to the idea that we can attract money and jobs to our economy by allowing tourists already coming here to spend some more of their money having fun with casino games before they leave. If these ‘no’ folks really thought about the needs of the population, especially the indigent, they would want to see the economy blossom and thus see their quality of life improve. That means they would be in favor of an initiative that finally brings meaningful amounts of money back into the economy instead of against it. Maybe they just don’t care. Maybe they care but just haven’t thought it through.

Those already wealthy can afford to stay here. Those on the middle and bottom rungs are getting to the point where they cannot. Many of our local families are not making ends meet. This Casino Act offers the means, which with hard work and proper oversight, can give the economy the boost it needs to keep families together and to get the CNMI back on the road to recovery after 10 years of languishing.

Please consider the option of continuing to do nothing new to help ourselves. The results of doing the same things we are already doing are pretty obvious. Just look around you. Please consider voting Yes for a chance, a hope, a ray of light in an otherwise bleak economic landscape.
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Pipeline
We dodged another bullet over the weekend as contractors working with CUC repaired a damaged section of the one mile pipeline that carries oil from Lower Base to the storage tanks at power plant #1.

This is the third time in a year we have been lucky. Only a few gallons of diesel were leaked thanks to a fast cleanup response by CUC and its contractors. One of these days we will not be so lucky. An ecological disaster awaits when that pipeline is struck and broken open by one of the big trucks plying the road within inches of the pipe daily. Think thousands of gallons of oil being spilled. Think a raging fire that engulfs the port and maybe even the Lower Base storage tanks. Think disaster.

Compared to that scenario, the few hundred thousand dollars it would take to build a barrier in front of the pipeline would be chickenfeed. Need I say more?
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Quotes of the week:
I find the great thing in this world is not so much where we stand, as in what direction we are moving: To reach the port we seek, we must sail sometimes with the wind and sometimes against it, but we must sail, and not drift, nor lie at anchor. Oliver Wendell Holmes (1809 – 1894)

Your representative owes you, not his industry only, but his judgment; and he betrays instead of serving you if he sacrifices it to your opinion. Edmund Burke (1729 – 1797)

8 comments:

Pragmatic Plato said...

Bruce,

Please see my comments regarding the SCA on this forum. It is getting quite a bit of posted comments. I really would like to hear what you have to say regarding my posted comments.

http://www.tinasablan.com/forum/?p=13

My comments are towards the bottom. I have followed the thread for some time and just cracked. I am tired of all the propoganda coming from people who haven't even looked at the actual initiative.

It is sad that the initiative is not even posted in its entirety on the VoteCnmi.gov.mp website.

PP

Bruce A. Bateman said...

Here is a link to the Act oh Greek one: http://docs.google.com/View?docid=dd7vvphq_1dcrvts

I have read it.

Yeah, I'll wander over there later in the day to see what's up.

Were you at the debate on Thursday evening? If so you pretty much heard my thoughts on the matter.

Bruce A. Bateman said...

Had you attended the forum/debate last Thursday, plato, you would have found the answers to most of your reservations.

What is your particular ax to grind, plato? Why so vehemently against trying something different than the status quo which has been leading us down the tubes for 10 years now? I smell a hidden agenda.

Pilgrim said...

Bruce.. I notice that in today's (monday) trib, CUC had to recall the 20 Filipino engineers to fix the engines. They worked on them over the weekend and the problems escalated and the local crew could not get them fixed.

Here is the question.. those Filipinos have been working at CUC for many many years. Why, in all that time, no local has been trained yet to do the necessary work over there? Is it because most of the time they just let the Filipinos do all the work while they wait around for payday instead of learning the job? I don't really know but the question begs an answer.

Bruce A. Bateman said...

I don't know the answer to that question, Pilgrim, but it deserves to be asked.


Perhaps there have been people trained, but they left or retired.

Perhaps no one had the technical curiosity to learn.

Especially disturbing is why nothing was done to train replacements as the deadline loomed.

I think you need to pen that question to the CUC power plant manager. Or perhaps the overall operations manager.

Please let me know if he answers.

Thanks for reading.

Pragmatic Plato said...

Bruce,

This Act and the way it is being addressed is the the status quo which has gotten us into the mess we are in.

I fear that the cycle will never end. I was here when our status quo got us into the Garment Mess and I am bearing witness to a bigger mess in the making.

It is my opinion that you are taking this way to lightly. Why are you willing to gamble on the chance this this may work? Why not assist in drafting up legislation that will properly allow casino gambling on Saipan? Legislation that follows along the same lines of other places where casino gambling is working.

Why rush to pass this horribly drafted piece of legislation that will undoubtably get the CNMI Gov't into a whirlwind of legal battles that will cost us more than just the money needed to fund the Commission until a casino opens and shows a profit.

I do hope you haven't embraced the support of this so much that it is now not possible for you to take a step back and look at the actual provisions contained within the SCA.


By the way my hidden agenda is not so hidden:

I care about the CNMI and I do not want to do anything that will adversely affect us. There are way too many grey areas in this SCA and way to many things that point towards waste and corruption not to mention putting out Public Lands at risk.

I have no problem with Casino Gambling. I do have a major problem with this SCA.

Do you happen to know who drafted it? I really think the attorney should be disbarred and any fees that were paid to him be returned. It is that terribly written.

PP

Pragmatic Plato said...

By the way Bruce. Do you know if the NMDIC is an already formed and running for profit corporation?

I assume that you have no problem putting all your eggs in their basket and hoping that they have success in finding Casino Operators and then have success in negotiating with them to set-up a Casino here.

I am really curious as to who is NMDIC?

PP

Pragmatic Plato said...

The SCA basically makes it mandatory for any potential Casino Operator to be forced to "partner" with this For-Profit NMDIC. THis is not normal and not the process involved in successful casino areas (Macau, Vegas, Singapore, etc).

Why would any sensible Casino Operator want to set up shop under thoughs conditions?

Why would they want to be forced to "partner" and forced to profit share with a corporation that is nothing more than a Middleman in the entire Casino Gaming process?

Why would the CNMI not just set up a Commission and then allow that commission the right to regulate who gets the license(s)? We could always pencil in how many licenses they can give out.

I don't understand why you would want to go about legalizing Casino Gambling in this way. This if anything will lessen the CNMI's chances of ever tapping into the Casino Gaming Market. No sane investor would subject themselves to this.