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Low rates lead to unreliable supply, manager says

KOROR, Palau (Island Times, Nov. 22, 2011) – Newly-appointed interim general manager for Palau Public Utilities Corporation (PPUC) Ken Uyehara has eyed anew the need to have a new tariff to improve the corporation’s finances to be able to keep up with the required maintenance of generators and other facilities.

When Uyehara left PPUC earlier this year, he was pushing for a tariff increase that was reportedly recommended not only by the management but also by JICA in 2008 PPUC Strategic Plan and by a DOI consultant to be implemented in September of 2009.

He believes that keeping the tariff low will inevitably result in PPUC’s inability to provide reliable power. He added that lack of an appropriate budget will result in generator failure and a return to power rationing. PPUC reportedly has the lowest rates in Micronesia.

At yesterday’s press conference, Uyehara said that he has tasked PPUC’s chief financial officer to relook at the proposal to have new tariff.

Had the tariff increase been implemented, Uyehara anticipated that PPUC would have collected $7 million more cash at this time.

Uyehara said that PPUC cannot be sustained for longer years with inadequate funding. "It needs to operate efficiently," Uyehara said, adding that an increase in tariff is anticipated by January next year.

[PIR editors note: The approved budget for the 2012 fiscal year passed muster in Palau’s senate early this month. The bill authorized US$57,950,000 for the coming year, which was less than initially proposed by Palau’s president, Johnson Toribiong. The budget draws mostly from local revenues and Compact of Free Association funding provided by the United States.]

On the other hand, with the government owing PPUC almost $3 million, Uyehara placed confidence on the commitment made by the government earlier to pay. Although this amount, if paid, could greatly help PPUC in its operations, Uyehara said his priority this time is not to push the government for payment, but to have the other generators repaired to bring them online and put an end to power rationing.

Uyehara said the entire island demands at least 12 megawatts. Babeldaob areas demand 1.2-1.6 megawatts power. These areas are powered by Ngerulmud generators.

In Koror, Airai and Aimeliik areas, Uyehara disclosed that there is not enough power this time. Malakal Power Plant’s (MPP) capacity is reportedly low, at about six megawatt. Thus, power rationing continues.

[PIR editor’s note: Power supplies were rationed after generators at the Aimeliik Power Plant were destroyed in a fire. The generators were switched on and then given scheduled rest periods, with rest periods ranging from four to eight hours.]

Uyehara said that PPUC is working on restoring back online two small generators at MPP. Needed parts were purchased. If these get online, Uyehara does not assure that power rationing will end but at least, schedule of outages may be lessened.

As to the 5-megawatt Niigata generators, Uyehara said that he convinced TESS Engineering to have one engine online by the end of November. But again, Uyehara said he does not want to make an assurance that power rationing will stop by the end of the month.

On another development, Uyehara said that the team from U.S. Army Corps of Engineers has already arrived on island and that they will be here for two weeks to look into the situation of the Aimeliik Power Plant (APP).

Uyehara said that team is looking into the possibility of salvaging the generators at APP as well the structure of the power plant.

With the ongoing power crisis, Uyehara appealed for the public’s understanding and cooperation. "Slowly but surely we will restore power," Uyehara said.

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