Pohnpei Governor Seeks Legislature’s Help With Electricity Issues

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Ehsa hopes to do something about power shortages, high cost

By Bill Jaynes

POHNPEI, Federated States of Micronesia (Kaselehlie Press, Oct. 21, 2014) – In a series of letters to Speaker Fernando Scaliem of the 8th Pohnpei Legislature, Governor John Ehsa encouraged the legislature to join him in trying to do something about Pohnpei's power shortages and high per kilowatt hour prices. In September, many Pohnpei Utilities Corporation customers were shocked to learn that the per kilowatt hour price had increased from the August price of 50.38 cents to 60.83 cents. PUC offered little to no explanation other than a sign that hung in the office saying that the fuel cost had increased to 46.83 cents per kilowatt hour. Last week PUC lowered the price to 56.11 cents. Governor Ehsa's letter to Speaker Scaliem included a copy of an internal circular from FSM Petroleum Corporation.

The circular showed that the wholesale price it charged PUC for a gallon of diesel has steadily decreased each month from May's price of $4.05 to the current price of $3.89. During that same period of time, PUC's per kilowatt hour rate has varied. In May PUC charged its customers 55.25 cents. They lowered the price to 54.42 cents in June. In July they increased the price to 55.74 cents. In August the price was down to 50.38. One month later PUC increased the price to 60.83.

"Electricity price increases are not directly related to the price of fuel that we sell to PUC," the FSMPC circular concluded. "Vital will continue to keep fuel prices to its main customer, PUC, as low as possible. The Company expects a continued stable, low wholesale price to the state utility through the fourth Quarter of 2014. Whether or not PUC is able to pass along these fuel price savings to rate payers is dependent on their generation efficiency, hydro power, and solar generation." In Governor Ehsa's October 2 letter he reminded Speaker Scaliem that on September 9, 2012, the Legislature nullified his declaration of emergency regarding Pohnpei's power crisis. "Since then the problem has not improved," he wrote. "There are still unexpected and frequent power outages around Pohnpei, and we are still under power rationing and the cost of electricity (per kilowatt) continues to increase, almost on a monthly basis."

The Governor lambasted the efforts of the PUC Board and Management saying that they had "completely failed" to restore the utility's power generation capacity, despite what he called their "alleged violations and non-compliance with certain provisions of Title 34 of the Pohnpei Code in their desperate and idiosyncratic ways to resolve the power generation crisis." "Mr. Speaker, as leaders, we must do something. I request that we take the matter into our own hands and work together to find an amicable solution once and for all to the PUC problem for the benefit of all power users in Pohnpei," the Governor urged. When the letter went unanswered by October 13, the Governor wrote another letter itemizing some of what he called the "major problems" of PUC that he believes "require joint action by the Legislature" and his office.

He outlined four points that he wants to visit regarding PUC's activities:

During an interview in his office this morning, Governor Ehsa said that PUC doesn't report to him anymore. He said that during his travels he had been looking into possible sources for generators. When he was in Guam he found used generators from the U.S. Navy that might have worked. He asked the PUC board and management to come and evaluate them which they did. PUC not only found the generators to be too small but they were also used and rejected them. This was before the FSM Congress had appropriated $2 million for the purchase of generators for Pohnpei, and also before it had ratified a World Bank technical assistance grant for the same amount of money. Ehsa said that before that amount of money became available, he contacted several companies asking for bids for generators.

By his estimation EIG (Energy Infrastructure Global) provided the best delivered and installed price for four 2.5 megawatt generators at $900,000 per generator. He called the proposal a "no-brainer" since, as he understands it, PUC has said it needs 10 megawatts of power generating capacity and since EIG is a "local company". He said that he made the recommendation to PUC but the utility rejected it. The legislature scheduled a public hearing regarding PUC specifically regarding the pricing structure. The meeting was scheduled at 1:30 on Thursday, October 23, a day after this newspaper's deadline. In the Governor's first letter he wrote that the Board Chairman and some other members of the Board reported a major alleged violation of the PUC law by the management. He said that he intends to deal with that matter separately with the Board. Governor Ehsa has also asked the Supreme Court to decide whether or not PUC had to write to enter into an agreement for FSM Petroleum Company to provide power generation services to the utility. He said today that he feels that FSMPC has no business in the power generation business but should instead be providing fuel discounts.

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