The American Samoa Power Authority, (ASPA) will be holding a public hearing notifying the rates and fees that were changed last year, as well as to solicit feedback for proposed rate changes that ASPA is planning to implement in the near future, says ASPA CEO, Utu Abe Malae.

The feedback is not for electricity rates.

Responding to Samoa News queries from off island, Utu said the public hearing will be conducted on Wednesday December 17, 2014 at the Veterans Memorial Center from 10a.m. to 12p.m.

“The purpose of this hearing is to notify the public on rates and fees that were changed last year as well as to solicit feedback for proposed rate changes that ASPA is planning to implement in the near future. ASPA will also be informing and soliciting feedback from the public on changes to the Net Metering policy that affects customers that currently have or are planning to have a Photovoltaic (PV) system or solar panels.”

He said that ASPA conducted a rate study earlier this year for Water, Waste Water and Solid Waste services to gauge if current rates meet requirements for plans regarding infrastructure needs, daily operations and future improvements for these respective services. They will present this plan to the customers “because our customers are stakeholders in ASPA and your voice matters.”

 “For ASPA to continue to provide quality, safe, economical and sustainable utility service, the public needs to understand where their utility payments are going and why ASPA needs to grow as a utility.”

Samoa News asked Utu to explain the proposed rates and he responded that ASPA will be presenting to the public for comment regarding rate changes for Water, Wastewater and Solid Waste.

Two scenarios will be presented for Water/Wastewater and two scenarios for Solid Waste:

Water/Wastewater

Scenario 1: Where the proposed rate considers that both operating and capital expenses will be funded along with the issuance of long term debt of $8.5 million for much needed wastewater improvements. ”(You can see here the link with the revival by Governor Lolo of the functions of the American Samoa Economic Development Authority).”

Scenario 2: Where ASPA will not issue long-term debt to fund any of its capital improvement projects. The rate adjustment will only fund operating expense increases. 

Utu said in either scenario, there will be no increases for Water until the year 2016, when there will be a $0.29 increase in the base charge and an increase of $0.06 for the volume charge per 1,000 gallons for residential customers.

“For Wastewater, both scenarios propose an incremental increase in the Groundwater Protection Fee from 2014 through 2017. The incremental increases proposed in scenario 1 are slightly higher than scenario 2 in 2015 onward due to the capital projects that are included in rates proposed for scenario 1.”

Effectively, the increase in the residential rate would amount to about $1.11 per month for Water and Wastewater services in the first year. The maximum increase for residential customers (up to 5,000 gallons) would be in 2016 at approximately $4.03. However, in 2016, customers would experience a decrease in the rates of about $2.00.

SOLID WASTE

Scenario 1: Where the proposed rate adjustments are proportionately higher than those applied to commercial customers in order to reduce the discrepancy between revenue and cost of service for the residential rate classifications.

Scenario 2, Utu said the proposed rates were developed assuming that the Waste Conversion Plant is online in FY 2016. “Therefore, the increase is less than what is proposed under scenario 1.”

The proposed rate increases are for all classes of service with the exception of the Small General Service (SGS) commercial customers. This is due to the analysis conducted by the project team which evaluated the revenues against the cost of service for each class of service under Solid Waste.

The results showed that residential customers have been subsidized by all other customer classes, while small general service customer revenue requirements were lower.

As a result, residential rate adjustments are higher than for commercial small general service, said Utu. He said effectively, the proposed rate increase for residential customers would amount to $2.76 per month in the first year. However, the increase would be reduced to $0.58 and $0.59 in years two and three, while there would be no increase in the fourth year.

“Other than the proposed rate changes for Water, Wastewater and Solid Waste, ASPA is also presenting to the public a schedule of fee reductions which were implemented in January 2013. Such fees include new water meter installations, pause fee, meter replacement fees, etc. The average reduction in the fees amount to about 50%.”

Samoa News also inquired about the “Net Metering policy” he mentions. 

Utu responded that ASPA continues to pursue efforts toward renewable energy as a means to reduce the cost of providing electricity to its customers, and supports customers who self-generate. ASPA is also working to develop a net metering rate that is aimed at fairly compensating solar PV customers for self-generation while ensuring that it does not compromise or lose its ability to cover its fixed costs in supporting solar PV customers.

ASPA’s current Net Metering policy provides that solar PV customers’ accounts are netted for the amount of electricity consumed from the ASPA grid against the amount of the electricity produced by their solar panels. The accounts are reconciled annually and zeroed out upon the start of the new net meter year.

The proposed change provides for implementing a rate for the energy that solar PV customers generate which would be equivalent to ASPA’s avoided costs per kWh as a result of the self-generation of electricity.

Regarding the rate study for water, waste water and solid waste, Utu said ASPA is legally mandated to periodically develop and publish tariffs and schedules of rates, charges and services for providing utilities.

ASPA contracts an external consultant to conduct a rate study for all its utility services. In February 2014, ASPA engaged Economists.com to conduct a rate study for the Water, Wastewater and Solid Waste services under ASPA.

The rate study objectives were to:

·       Conduct a comprehensive analysis and evaluation of the current cost of service and revenue requirements for each service to determine whether the current rates are sufficient;

·       Forecast water, wastewater, and solid waste operating and maintenance costs, capital outlays, debt service funded by rates and non-rate revenues for a 10-year period;

·       Analyze the impact of the Waste Conversion Plant that is scheduled to launch in 2016.

·       Determine the allocation of water and wastewater costs between customer classes and functional areas;

·       Analyze the impact of the reduction of non-revenue water and infiltration and inflow into ASPA’s wastewater treatment plants;

·       Study the impact of various additional costs, including but not limited to the hookup of new wastewater customers, new wells, micro-filtration expenses and UV treatment expenses;

·       Assess the impact of the decision to issue long-term debt to fund wastewater capital improvements over the next 10 years.

Utu said, “The results of the rate study were translated into the recommended rate changes for each service and for each customer class within those services to ensure that the revenue requirements and cost of service for sustaining ASPA operations and implementing infrastructure improvements can continue so as to provide quality and sustainable utility services for the people of American Samoa.”

He added that the process of performing a rate study also gives ASPA a chance to review all its costs and the efficiencies of each delivered service. “It is one thing to have low costs and another to provide satisfactory service to customers. 

“Both reductions and increases of rates and fees must be presented to the public,” the ASPA CEO stated.

The recommended rate changes from the study will be presented to the public on December 17, 2014.