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Inefficient operations raise costs in island nations

By Giff Johnson

MAJURO, Marshall Islands (Marianas Variety, Nov. 10, 2009) – Pacific island utility companies, losing tens of millions of dollars annually from inefficient power systems, are getting help from the United States and the European Union to fix the problem.

The U.S. Interior Department and the EU are funding assessments of plant and line power losses in 20 Pacific utility companies that support populations ranging from 1,000 people to six million.

"A big issue for Pacific utilities is inefficient operations that cost the utility companies money," said Tony Neil, who heads the Fiji-based utility umbrella group Pacific Power Association. With fuel costs rising and expected to hit $100 a barrel again by the end of this year inefficiencies in operations "are becoming a more important issue to resolve," Neil said.

Many power companies are losing nearly 30 percent of the power produced because of problems in power plants or in the distribution system.

The Interior Department is providing $300,000 for an assessment of the 10 power utilities in the 10 U.S.-affiliated islands in the region, while the EU is providing a similar amount for a survey of the rest. The Interior-funded project gets underway next month in Majuro, while the EU-supported work is expected to start in early 2010, Neil said.

In the Marshall Islands, the government’s Marshalls Energy Company lost $3.4 million last year through problems in its distribution system and in the two power plants, said general manager David Paul.

In a normally functioning power operation, a 9 percent loss is expected, Neil said. But losses in Majuro are running at nearly 30 percent.

"Losses here are 300 percent higher than expected," he said, which is a similar pattern found in many of the small island utilities.

Causes of the losses range from old engines that burn too much fuel for the power they generate to problems with cables and transformers in the distribution system.

"This study is an integral part of our comprehensive recovery plan," said Paul.

"It will quantify our load losses and what is needed to correct the problem."

Aside from identifying the problems, the assessment will produce a priority list of equipment that needs to be replaced to operate efficiently, Neil said.

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