ASPA rate hikes for services postponed 6 months

It cites tough economic conditions as the main reason
fili@samoanews.com

With the territory already facing difficult times — including the 5 week temporary closure of StarKist Samoa and the previous reduction in ASG working hours — the American Samoa Power Authority (ASPA) Board of Directors has “unanimously” approved a recommendation to delay the rate hike for water, waste water, and solid waste service.

The rate hike for the three ASPA services were to become effective last month. For example — the base charge for residential rates for water was to increase from $14.62 to $14.91 while the “volume rates” increases from $2.81 to $2.87 for usage of 10,000 or less gallons of water.

For wastewater, the base charge for the “ground water fee” was to be hiked from $20.05 to $23.56 for residential, while home collection for solid waste (trash) increases to $12.57 from $11.98, according to the ASPA public notice in 2015, which is also available on its website <www.aspower.com>

Speaking at Wednesday’s cabinet meeting, ASPA managing director Paul Young said that over a period of one-year, the rate hikes for water, wastewater and solid waste would raise revenues for ASPA by about $844,000.

He explained that ASPA management presented a recommendation at a board of directors meeting last week Friday to “delay the third year of a four year” rate hike for the three services by six months. “So we would be foregoing about $422,000” in revenue, he said.

Young explained that the management’s recommendation was “based on economic modeling that show that the rate increase would increase household expenditure on utilities by a tenth of a percent” and that ASPA also took into “consideration current the economic situation” in American Samoa.

“This rate increase was supposed to go into effect on Oct. 1st and this is just when government employees were returning back to a full 40-hours a week,” he said. “Additionally, we are taking into consideration, the fact that the canneries closed for five weeks and we are now heading into the Christmas season.”

(The canneries referred to are StarKist Samoa and American Samoa Talofa Systems Inc., the Satala-based plant that manufactures cans for StarKist Samoa. The five-week shutdown of production, put around 1,600 workers from both companies out of work with no paycheck)

“So based on all of that, the recommendation was made to the board, that we postpone the rate increase by six months,” Young said, adding that the “board has unanimously voted to accept the recommendation.”

Young acknowledged that the rate hike “would probably decrease our accounts receivables.”

However, “we felt that... this [rate hike] would create undue hardship [and] we also felt that it was inappropriate at this time, given the circumstances of families that are struggling [with] the five week furlough and other things, to impose a rate increase that would cause that level of increase in utility expenditures,” he said.

In response to the ASPA announcement, Gov. Lolo Matalasi Moliga told cabinet members, “I know this is the most difficult time in our economic moment” and “we would strongly suggest that ASPA find every means to do away with any increase in rates.”

“We are dealing with some serious economic issues and we would like to see that we make sure that any increase now, will have to be well calculated before we implement [them],” he continued.

ASPA executive director Utu Abe Malae is reportedly off island for meetings.

BACKGROUND

Following a 2014 rate study by US-based firm, Economists.com, ASPA announced in May 2015 rate hikes starting in June of that year up to 2018, but no rate hikes for electricity, according to ASPA’s public notice at the time. The rate hikes for 2015 and 2016 covered only wastewater and solid waste.

The third scheduled rate changes were set for October 1, 2017, affecting Water, Wastewater and Solid Waste, with the fourth change slated for October 1, 2018 for all three services.

“The implementation of the new rate plan for the respective services will fund expansion and maintenance costs for these services in order to continue to provide quality service to our customers,” according to ASPA.

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