Senate calls on ASPA to examine further ways to cut utility costs
The Senate has called on the American Samoa Power Authority to look into the possibility of the authority not paying leases to the government but instead, using that money to help lower electricity costs, which would benefit rate payers.
Sen. Magalei Logovi’i raised the issue at last Friday’s Senate Government Operations Committee hearing, chaired by Sen. Mauga Tasi Asuega, when the committee was reviewing two leases of government land in Tafuna for ASPA.
The Tualauta senator said ASPA is forking out a lot of money to pay land leases to ASG and asked if ASPA would reduce their electric rates if such payments were not made, but instead applied towards lowering utility costs.
“Instead of paying the leases, ASPA can save this money to help further bring down the cost of electricity,” said Magalei during the hearing which was attended by ASPA chief operations officer, Reno Vivao. “If the leases are not paid, is there a chance there would be a reduction in electric rates?”
Vivao responded that he couldn’t immediately provide a direct answer to the question, as it needed to be reviewed by ASPA, which continues to work with the government on various issues dealing with costs to the authority.
For example, he said all ASPA imports are subject to the excise tax and something like this is one of the areas that both sides continue to work on. Vivao said ASPA can review the issue raised by Magalei and hold discussions with the executive branch.
He also said ASPA does not want to do anything that would disappoint the Treasury for not paying its share of taxes or leases. However, in the end, if there is a chance of lowering the rate through such an agreement with the government, it's all good for the benefit of the community, Vivao added.
“If these costs — land leases and excise tax — are not paid to the government, how will that help to lower electric costs for the public?” Magalei asked, adding an analysis would be helpful in discussing such matters with the government especially regarding electricity costs, where rate payers continue to suffer.
The senator acknowledged there is not much ASPA can do when fuel prices goes up, which means the fuel surcharge in ASPA’s rate must also be increased.
He informed Vivao the cost analysis could also cover the impact on ASG finances if these leases and excise taxes were not paid by ASPA.
Towards the end of the hearing, Mauga noted that since Utu Abe Malae has taken over the helm of ASPA management, there has been a reduction on various ASPA rates and services.
However, he suggested that Vivao share with Utu and the ASPA board the issue raised by Magalei because lowering rates is an important issue to the public.
In his address to the Fono this month, Gov. Lolo Matalasi Moliga noted the cost of electricity since the inception of the new board and Utu’s leadership has been reduced by an average of 4-cents per kiloWatt hour over a period of the last eleven months. Further, the fees for some of the services provided by ASPA have been reduced by as much as 50%.
“...the board and management are well aware of their mandate to bring the cost of utilities down to better reflect the earning capacity of our people and the state of our economy,” he said. “This is critical to our future, as the cost of goods sold to the people is influenced by the cost of utilities.”
Moreover, “our ability to attract new investment for economic expansion is improved if the cost of doing business is in line with national standards,” he said.