AM. SAMOA UTILITY CUTS PAY, WORKING HOURS

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Five percent reductions follow criticism

By Fili Sagapolutele

PAGO PAGO, American Samoa (Samoa News, April 13 2010) - Instead of a reduction in workforce, the American Samoa Power Authority has reduced working hours for its staff, while management has reduced its pay, according to ASPA’s recent presentations to both the Senate and House.

Several lawmakers have voiced their concerns about ASPA revenue and expenditures, especially following last September’s earthquake and tsunami which completely destroyed the Satala power plant.

During last week’s House committee hearing, ASPA officials informed lawmakers that the board and management have implemented cost saving measures in order to reduce expenses in response to their current financial woes.

ASPA acting chief executive officer Andra Samoa told lawmakers that ASPA opted to do the reduction in hours in lieu of reduction in workforce as it is the least severe action. The reduction in work hours is across the board, she said.

According to ASPA’s presentation, the two hours a week "furlough" is about a 5 percent reduction. It also says that ASPA officers and managers all have voluntarily reduced their compensations by 5 percent.

Board members have also contributed, according to two House members, although they couldn’t recall how much the members contributed to keep costs down. (Local law states that $5,000 a year is allocated for each board member and $6,000 a year for the board chairman for compensation. )

House members were also told that ASPA will be implementing the proposed rate increases that went through public hearings in August last year and the rates will go into effect in April or May this year, according to ASPA testimony and presentation.

House Vice Speaker Laolagi F.S. Savali Vaeao said last Friday that the committee had recommended to ASPA during the hearing to provide advance public notice before the new rates are implemented.

During a Senate briefing late last month, ASPA said it plans to increase the electric rate to base rates of electricity by 1.5 cents per kilowatt, increase the solid waste collection fee from $3 to $5, increase water rates, and institute a fee for sewer maintenance.

Some good news is that ASPA is working on a renewable energy plan, which if successful, ASPA says, it will then be able to incrementally decrease rates or provide rebates.

According to ASPA, it’s revenues cannot cover expenses and tsunami recovery efforts, adding that the closure of COS Samoa Packing has resulted in a 12 percent loss in revenues— which ASPA had predicted.

ASPA says that tsunami related expenses are currently estimated in Federal Emergency Management Agency (FEMA) project worksheets at $68 million and even with a 10 percent matching, ASPA must find $6.8 million in matching funds and this does not include business losses, which ASPA says are not covered by FEMA’s public assistance program, according to the presentation.

Rebuilding the Satala Power plant is a huge expense to ASPA and a big concern to lawmakers and House members requested ASPA to provide additional information.

The information is the assessment and project plan developed by FEMA and ASPA as summarized in a project worksheet, and included in a Mar. 31 report from ASPA board chairman Asaua Fuimaono to House ASPA Committee chairman Fa’afetai ‘Iaulualo.

Total cost for rebuilding the Satala Power Plant is about $52 million and Fuimaono said in his letter to ‘Iaulualo that ASPA is currently in the process of securing an Architectural and Engineering (A&E) company that will be responsible for assisting ASPA with evaluation of sites and preparation of specification for the new plant.

"Once the plan has been prepared, we will submit the plan for comments by FEMA," Fuimaono wrote. "Final decisions regarding location and actual project costs will be made at that time."

He also noted that ASPA has received preliminary approval for an 18 month contract with Aggreko, the provider of the Temporary Turnkey Power System to assist with power generation on Tutuila due to the destroyed Satala plant.

According to the board chairman, FEMA is aware of the process and time that ASPA will need to complete due diligence required to address the challenges of American Samoa land permitting and regulations.

Fuimaono’s letter also outlined ASPA’s revenue report requested by the committee, which covers the first and second quarter of 2010.

Revenues for electric division were $13.9 million; water division $1.6 million; wastewater (percentage of water revenues) $241,557; solid waste $538,574; and fuel revenues $23.58 million, the letter says.

Samoa News will report at a later time from the letter and the presentation to both the Senate and House, which were both similar in context.

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