PACIFIC ISLANDS REPORT

Pacific Islands Development Program/East-West Center
With Support From Center for Pacific Islands Studies/University of Hawai‘i

By Olivier Wortel

KOSRAE, Federated States of Micronesia (Marianas Variety, Dec. 23) — For 10 years, the people of Kosrae have enjoyed among lowest electricity rates and most reliable power supply in the Pacific region.

But that could end as the island state faces the loss of a $470,000 subsidy from the United States that expired with the recent approval of "Compact II" with the U.S.

According to the annual report, KUA the subsidy represented about 25 percent of the utility’s operating revenues in 2003.

According to the annual report recently released by the Kosrae Utility Authority, power supply service should get better and energy rates will remain relatively low — 8 cents under 100 kilowatt hours used and 15 cents up to 1,000 kwh for most residential users — at least for the short term.

Revenues from energy sales accounted for 65 percent of operating expenses, while the remaining 10 percent of the operating budget came from federal reimbursement funds and interest income.

Total revenues from its various income streams were $1,869,502, while total expenditures were 1,822,595, resulting in a net income of $46,907.

A total of $230,833 is accounted as receivables still owed from the Kosrae state government

Fuel costs for KUA, as for the state as a whole, were the bulk of its costs for total operating expenses, accounting for 42 percent of expenditures.

A $1.12 million pole hardening project funded by the Federal Emergency Management Agency, the U.S. Department of the Interior and KUA was completed in FY 2003, upgrading 139 wooden poles with hard fiberglass poles from the government capitol of Tofol to Okat, hub of industry with the Airport, SEMO dry dock, Okat Marina, Micronesian Petroleum Corp. and the Port Authority.

"The project also provided the opportunities for KUA linemen to have the practical and hands-on training in upgrading and constructing the power distribution system — and will be able to perform similar works — without the need for outside contractors and assistance," the report stated.

KUA also completed a line extension project to Boro Mountain, part of the cell phone tower infrastructure requested by FSM Telecom. The authority also completed the Lelu causeway project, installing high voltage fiberglass power poles to the most populace part of the island, and insuring against "salty mists and strong winds."

KUA also continued to "promote conservation of power usage" through the installation of 429 cash power meters, an electronic system that is paid in advance by consumers and businesses. The meters, stated the report, are the likely result in the 596,527 gallons of diesel fuel consumed in 2003, compared to 614,596 for 2002.

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