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Senate, House approve 2nd reading of ASPA budget

Interim ASPA board says Fono has final the authority for their budget
fili@samoanews.com
ASPA interim chief executive officer Utu Abe Malae before the Fono Joint Budget Committee. [photo: FS]

The Senate and House yesterday approved in second reading their respective versions of an administration bill seeking $86.59 million to cover the last nine months of the current fiscal year for the American Samoa Power Authority.

The third and final reading is set for today.

Earlier in the morning the Fono Joint Budget Committee convened to discuss the bill and witnesses who attended the hearing included interim chief executive officer Utu Abe Malae, interim ASPA board chair Fonoti Perelini Perelini, chief operation officer Reno Vivao and chief financial officer Susana Fai’ivae.

Sen. Nua Saoluaga brought up the subject of ASPA board authority, asking if it is also the opinion of the new interim board and specifically Utu that it's the board of directors who give the final approval of the authority’s annual budget, not the Fono.

Board chairman Fonoti responded that it's the interim board’s firm belief — throughout all these years and even the time that Utu was at the helm of ASPA — that the Fono has the final authority when it comes to approving ASPA’s annual budget. The answer was well received by the joint committee.

LOWER RATES

Utu shared with the joint committee the governor’s mandates given to ASPA and this includes lowering the cost of electric and water rates. He said a major expense for the electric division is the diesel fuel and oil used by ASPA.

As for the current rates, he said, they are currently being analyzed along with rates such as the underground water protection fee. He reiterated that this mandate, which he described as a challenge to ASPA, called for a complete and full review and analysis of every revenue making aspect of ASPA.

There was a question from the committee as to whether another cost savings, which would result in the reduction of rates, will be in the area of ASPA personnel. Utu responded that personnel costs are a big expense not only for ASPA, but for ASG as well as the private sector.

He did tell lawmakers that there are a lot of people working now at ASPA compared to the years when he was at the helm of the authority. (ASPA’s FY 2013 budget proposal of $115.47 million, shows a workforce of 485.)

ALTERNATIVE ENERGY

Utu said the second challenge is to find alternative sources of energy so that there is less dependency on diesel fuel, thereby reducing utility rates, and he congratulated the current ASPA staff for the implementation of the federally funded photo-voltaic project at the airport area which is now providing solar generated energy to the electric grid.

(ASPA officials had testified last year that this project was estimated to reduce ASPA’s fuel consumption by 197,391 gallons and achieve an annual cost savings of about $790,000 annually.)

He said this project decreases fuel consumption as well as expenditures for the authority, which is currently working on a similar project that will produce 1.7 megawatts for the electric grid and this project will go out for bid soon.

SOLID WASTE/WASTE WATER

He says the other challenge for them is to divest solid waste and waste water divisions away from ASPA. They are looking to the possibility of working together with the private sector “to partner with them” on such service, providing not only good service but affordable rates for consumers.

SATALA POWER PLANT

Developing the feasibility of moving the Satala power plant to Tafuna area is another challenge given to ASPA, however Utu said the construction of a new power plant in Satala should be going out for bid soon.

He also said that new generators to be used by the proposed Satala Power Plant will bring big savings for ASPA operations. He said this project is funded by the Federal Emergency Management Agency (FEMA), who must approve the procurement process for the project, which also requires federal permits from the Environmental Protection Agency.

Sen. Su’a V. Matautia said he wants to keep the Satala Power Plant there because it not only provides sufficient electric supply for the Bay Area but the rest of the Eastern District. He also said that major companies — such as the canneries — are also in the Bay Area.

FUEL DIVISION

The other challenge is to develop a transition plan to get ASPA out of the fuel distribution business and place it in the hands of the private sector.

Sen. Mauga T. Asuega inquired about this operation and Utu said that during the last three years it was helpful for ASPA to be a fuel supplier, because it provided additional information to ASPA and ASG as to the actual costs pertaining to bringing fuel into the territory, as well as the actual costs involved in distribution.

And if it is returned to the private sector, ASG now has solid data and information on various costs in the areas of fuel, transportation and insurance, he said, and noted that during the interim board’s review of the fuel division, it was found that there were savings to ASPA for being a fuel supplier and those savings should be passed on to customers.

Responding to questions from Sen. Soliai T. Fuimaono, Utu said ASPA’s current contract with Exxon Mobil Oil as a supplier expires Nov. 30 this year and negotiations with fuel suppliers begin this week.

He said the negotiations will be completed and decisions made on whether to put this service out for bid before November. However, he noted that there are several matters pertaining to this division that need to be reviewed prior to making a final decision.

BUDGET ISSUE

When asked about the current budget bill, Utu said the budget submission was reviewed by the interim board and the financial data had been based on the ASPA budget proposal submitted last year. He said it covers the last nine months of FY 2013 and it's $86.59 million.

There was a call from Rep. Larry Sanitoa for ASPA to provide for Fono review a number of financial reports — the 4th quarter performance report for FY 2012, the first quarter for FY 2013 and any other financial statements for FY 2012.

Utu said there is an unaudited financial statement for FY 2012, but they have to be careful about releasing an unaudited report. The other reports,he said, could be made available by the end of business yesterday.

Senate President Gaoteote Tofau Palaie said the Fono should be provided financial reports covering the first three-months of FY 2013 for better understanding as to where ASPA stands financially.

He said getting financial reports from the last ASPA board was like a “tug-of-war” with the Fono going back-and-forth with the board and management at the time. He said it remains unclear as to why the previous board refused to provide financial reports that were requested.

Gaoteote said he is glad new faces are on the ASPA board, and glad to see the interim CEO at the helm. He said the goal now, is for ASPA to reduce rates instead of continuing to hire more people, while there is a public outcry over the high rates and fees.



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