ASPA rate hike coming next month — if board approves the move
Pago Pago, AMERICAN SAMOA — Revenue projection for utility rates for the American Samoa Power Authority (ASPA) FY 2020 budget proposal is based on the assumption that — among other things — the authority’s board of directors will approve a base rate hike effective next month, collecting just over $1.1 million in new money, according to ASPA’s more than $87.73 million FY 2020 budget book submitted to the Fono.
ASPA’s approved budget for FY 2019 was $94.84 million and the governor had informed the Fono that the reduction in FY 2020 is due to the drop in ASPA electricity due to the cost of fuel.
ASPA provided “highlights & assumption” of its budget in a separate section of its budget book — giving summary details of both revenues and expenses for each division.
Of the total proposed budget, 72% (or more than $63.40 million in revenues) is from utility rates and fees, while 28% — or more than $24.32 million — is from grants. Only 2% — just over $1.54 million — is considered miscellaneous revenue.
Electric revenue is noted as ASPA’s largest revenue source at $45.85 million (55%); followed by water at $8.57 million; wastewater with $3.79 million; and solid-waste with $3.63 million.
Under grants, water division is getting more than $11.86 million and wastewater at over $9.19 million. Grants for electric and solid waste division are both under $2 million. The US Environmental Protection Agency is providing more than $21 million in grants with the largest amount allocated for water and wastewater.
According to ASPA, “revenue projections for utility rates are based on the following assumption”:
• it is assumed the first base rate increase in 10 years for electricity will go into effect Oct. 1, 2019 upon ASPA board approval. The increase will generate an estimated new revenue for electricity at over $1.15 million;
• percent of increase or decrease of meter counts and usage by customers from FY 2018 to FY 2019; and
• percentage of actual collections versus billings in previous years;
Of the total revenue collections from rates and fees, residential service provides the highest revenue at $19.12 million; followed by industrial customers at $11.12 million; and large general service customers at $9.99 million. ASG is projected to provide $6.87 million in revenue (compared to actual FY 2018 revenue of $6.12 million); and ASG’s semi-autonomous agencies at $6.53 million (compared to actual revenue of $5.42 million in FY 2018).
According to the budget document, actual revenues for all customer class service in FY 2018 total more than $54.16 million. ASPA also provided a breakdown of its 4 divisions - revenue versus fuel surcharge.
Of the total $61.85 million in projected revenues from rates, ASPA says $29.62 million — or 48% — is from the base rate, while the balance is from fuel and pumping surcharges. Electric has the highest fuel surcharge of $28.8 million and $1.68 million for water, and no fuel surcharge for other divisions.
Among the highlights for expenses:
• total budget for fuel and lube oil at $27.22 million. This is for 9.8 million gallons of fuel at an average price of $2.87 per gallon; and lube oil of 60,000 gallons at an average price of $7.75 per gallon.
• payroll totals over $15.55 million, compared to more than $15.34 million for FY 2019.
Among the issues covered in the budget hearing last Friday was that ASPA gets a discount from its fuel supplier if payment is made in a timely manner. However, the joint committee was informed that in 2017 and 2018, ASPA paid its fuel invoices very late and therefore, didn’t get the discount, which range between 11-cents and 16-cents, per the agreement with the fuel provider.
Another issue raised again by the committee is the high electric rate on Tutuila and when it will be decreased. ASPA acting executive director Wallon Young pointed to two multi-million-dollar renewable projects — the PV solar and wind generation — which are ongoing developments. (Young made this same point during previous cabinet meetings and Fono hearings.)