‘More than $10m can’t be acquired’

The Electric Power Corporation (E.P.C) “cannot acquire” revenue of “more than $10million” for the 2010-2011 Financial Year.

The figure is revealed in a Parliamentary Committee report tabled and discussed in Parliament during its last sitting.

A copy of the report has been obtained by the Sunday Samoan.

Chaired by Falealili M.P., Tusa Misi Tupuola, the Works, Transport and Environment Committee (T.W.E.C.) reported that E.P.C calculated a “loss of 20,000,000 units of electricity” during the period in question.

“A total of 17.7per cent of electricity generated was wasted without receiving any form of income from it,” the report reads.

According to the Committee, the problem “cannot be minimised.” It blamed the “malfunction in distribution power lines, meter tampering; malfunction of cash power meters and free electricity consumption by some of the villages.” But showing promise, the Committee noted, is a project to upgrade “power lines and transformers.”

“The success of this project saved 7.3per cent of the total loss as confirmed by the Corporation,” the report says.

“10.4per cent of electricity has been saved from meter tampering, malfunction of cash power meters and the free electricity consumption by certain villages.

“The Corporation had already negotiated with villages affected and they came into an agreement to have cash power meters installed.

“At the compilation of this Report, almost every households have cash power meters been installed. The Corporation has also prioritized the process of meter reading in order to monitor and identify certain areas of which electricity loss took place.”

The T.W.E.C. Report says that from the total 109,029,555 units of electricity produced from the various electricity power stations, only 89,735,033 was used. In addition to $10,000,000 being lost, the report uncovered that there was an increase in money paid out to Directors in 2011 of $178,627 compared to the previous year which was $160, 865.

“Stated also as part of the benefits for the Directors (was) up to 300 units of electricity was provided per Director free of charge,” according to the report.

“The Committee was of the opinion that the same courtesy should be standardized across to all services provided to the nation as is practiced by the Directors.

“However, in the final phase of compiling the Committees report, the Corporation confirmed as per Cabinet Directive to discontinue the supply of free electricity to the Directors and Executive Management of the Corporation.” The T.W.E.C includes Afoafouvale John Moors (H.R.P.P) as Vice Chairman, with members including Levaopolo Talatonu (Tautua), Lealailepule Rimoni Aiafi (Tautua), Peseta Vaifou Tevaga (H.R.P.P), Toeolesulusulu Cedric Schuster (Tautua) and Fagaaivalu Kenrick Samu (H.R.P.P). Here is their report:

The Works, Transport and Environment Committee Report on the PP.2011/2012 No. 60 Statement of Corporate Objectives of the Electric Power Corporation for the Period 2012-2014 and P.P. 2011/2012 No.92, Annual Report of the Electric Power Corporation for the Financial Year Ended 30th June, 2011.

6. FINDINGS: 6.1 P.P. 2011/2012 No. 92, Annual Report of the Electric Power Corporation for the Financial Year Ended 30th June 2011.

The Annual Report of the Corporation considered clearly outlines the continuation of its operation by using modern technology for the improvement of financial services and continuation of renewable energy projects. The purpose of which is to minimize having to rely on imported diesel fuel for electricity production and to be unrestricted in the costing of diesel.

The Corporation produced 109,029,555 kilowatt (kWh) within the year under consideration. From this total amount, 35,248, 194 kilowatt hour (kWh) was generated from the Upolu hydro, 62, 709, 565 kWh from diesel in Upolu and 11,063,970 in Savaii. The Solar energy at Apolima produced 7, 826kWh as recorded. (Refer Table1).

Table 1. Electricity Production From the total 109,029,555 units of electricity production from the various electricity per stations, 89,735,033 units were used.

The Corporation verified an increase in consumer base from 38,158 to 39,922. A total of 17.7% of electricity generated was wasted without receiving any form of income from it. These problems cannot be minimized and controlled by the Corporation due to the following reasons: (i). Malfunction in distribution power lines; (ii). Meter tampering; (iii). Malfunction of cash power meters; (iv). Free Electricity consumption by some of the villages.

The Project of Upgrading power lines and transformers, intends to deal with the loss of electricity. The success of this project saved 7.3% of the total loss as confirmed by the Corporation. 10.4% of electricity has been saved from meter tampering, malfunction of cash power meters and the free electricity consumption by certain villages. The Corporation had already negotiated with villages affected and they came into an agreement to have cash power meters installed. At the compilation of this Report, almost every households have cash power meters been installed. The Corporation has also prioritized the process of meter reading in order to monitor and identify certain areas of which electricity loss took place. The Corporation also confirmed that, the next Annual Report will clearly identify certain areas of electricity loss.

6.1.1 MAJOR DEVELOPMENT PROJECTS Research is still being conducted in order to discover ways to utilize natural resources to generate electricity such as:

• Solar Energy

• Wind Energy

• New Hydro Researches are still being conducted by the Corporation with stakeholders and private sector. However, they are still faced with financial constraints, unavailability of technology and no benchmarked information in order to compare research in order to establish new projects. Solar Energy:

The Corporation completed 200 solar home systems, to families living remotely in Upolu and Savaii from the main electrical grid with no access to electricity. These recipients were identified through a household survey carried out in 2008, and now given priority.

This was funded by a grant donated by the Government of China. In the continuation in identifying these sources, of which was awarded to one of the contracts for the discussion of this operation, and which were completed at the end of April 2012. Through the Government, a grant of USD$4million from the Pacific Environment Community Fund was secured by the Corporation, to fund the 400kWp Solar Project.

The funding is part of the Government of Japan‘s US66million assistance for twelve (12) Pacific island countries, to assist in its efforts to mitigate the impacts of climate change, with Samoa being the first to get its proposal approved. Cabinet has also endorsed a proposal by an Independent Power Producer to set up a 2.5MW grid connected solar project. Negotiations are continuing between the Corporation and Independent Power Producer on the terms of this arrangement.

The Solar Samoa Company is expected by June 2013 to complete the agreement as signed with the Government. This agreement was based on funds requested by the Company to the Government to be paid.

This request was declined by the Government due to non compliance with the objective of electricity appropriate for the nation. Wind Energy: Collection of data is still ongoing for the six selected areas in order to decide on a set location, if it sufficient to generate electricity, the Corporation considers that this is a prospective and potential development if the data collected is adequate. Hydro monitoring and data collection programme: Feasibility studies have been completed for five (5) sites that were identified as priority sites for hydropower development.

The Corporation has also conducted consultations with selected villages where these sites are located, whereby they were presented with options on how these schemes would be operated. Data collection and monitoring will continue for these sites to ensure sufficient information is available for the future of these hydropower schemes.

6.1.2 POWER SECTOR EXPANSION PROJECT FOR SAMOA:

This project is still ongoing, with the aim to improve the capacity of the power sector in providing sustainable and reliable electricity services to all consumers at affordable prices and to reduce its technical losses. There are two subprojects under this project; Core Subproject:

1. Hospital Feeder Upgrading Stage

1: The Hospital Feeder Upgrading Stage 1 project was successfully completed in the beginning of the fiscal year 2010/2011 by local contractor Bluebird Ah LAL JV and the completion of this project sees the overloaded Hospital Feeder being relieved with some of the key areas being supplied from the same feeder. Setting up the feeders to distribute electricity from various locations, this enables a more reliable supply to some parts being supplied from the same feeder. This means there is a reliable supply to central business areas, Parliamentary Headquarters and the Hospital.

2. Prepayment Metering Project: The implementation of this core subproject continued for this fiscal year, and by June 2011, the total number of prepayment meters installed was 18,922 of the total 21,000 meters to be converted by 2012.

Implementation of this work is ongoing, and the Corporation was able to achieve set activities in the installation of prepayment meters to villages that had been using electricity without payment.

6.1.3 PROJECTS COMPLETED - FISCAL YEAR 2010/2011:

Refurbishment of Taelefaga, Loto Samasoni and Tanugamanono Plant Switchgears: The refurbishment of these switchgears comprises of the installation and monitoring of power usage. These switchgears are vital mechanical components to the system in reducing and monitoring power outages.

This core subproject was conducted by the North Power NZ Ltd from New Zealand together with the Corporation. Refurbishment of Alaoa hydro power plant: By assessment of the Corporation the plant has become unsafe for operation, due to obsolete spare parts and equipment. Also noted that although the plant is capable to produce electricity, it has been more than fifty (50) years ago since it was installed.

Tenix Alliance Company Limited of New Zealand was awarded this contract, and the Silva Transport for cleaning of head ponds, and the cutting of pipe lines. Currently, there has been an increase in the production of electricity from this plant the capacity of up to 100kWh. However, the only risk that is faced with this plant is that there is still public still access which affects the supply of water.

Talks were carried out between the Corporation and the Ministry of Natural Resources and Environment in order to resolve this problem. Consultations with neighbouring villages have also been conducted in order to reserve the water for the plant.

6.1.4 PROJECTS IN PROGRESS:

Fiaga Diesel Power Station The Committee noted that installation of this development on 900acres by the Government is ongoing. There are four (4) new diesel powered electricity generators with the capacity of 5 megawatts.

This development was installed in mind of the nuisance of the loud noises and the smoke from the generators as identified from the Tanugamanono generators. But the main objective of this big project is to minimise power outage and also to generate a sufficient flow of electricity to the nation.

Hospital Feeder Upgrading Stage 2: Works for upgrading the Hospital Feeder from 6.6kV to 22kV and undergrounding key high voltage cables from Tanugamanono power station to Motootua National Hospital have commenced and are underway.

Subject to the deliberation by the Committee, works for upgrading were still underway with the aim to improve the quality and reliability of electricity supply to the National Hospital.

6.1.5 STATEMENT OF ACCOUNTS:

The audited accounts for the Fiscal Year under consideration highlight the Corporations financial performance and cash flow.

The Corporation income for the current stands at SAT98,802,833 is an increase from the previous year which was SAT90,817,092. There was also an increase in expenditure for the Corporation of SAT96,014,364 in comparison to the previous of year which was SAT87,482,887. However, there is a decrease in net profit for the current year ofSAT1, 226,656 compared to SAT1,780,083.

The Corporation calculated a loss of 20million units of electricity due to a malfunction in electricity lines. Another contributing factor is due to illegal tampering by consumers in order to prevent and to reduce the units consumed, as well as a malfunction in prepayment meters. Also there is the issue of consumption of electricity by certain villages without payment. The aim of the project is to replace these electric lines in order to resolve these problems. The Corporation intends to strengthen its Legal Division in order to follow up these illegal activities.

There is also an intention to amend its Act to resolve this problem. The Corporation verified that more than SAT10million cannot be acquired due to electricity wasted. An increase in money paid out to Directors in 2011 of SAT178,627 compared to the previous year of which was SAT160, 865. Stated also as part of the benefits for the Directors up to 300units of electricity was provided per Director free of charge.

The Committee was of the opinion that the same courtesy should be standardized across to all services provided to the nation as is practiced by the Directors. However, in the final phase of compiling the Committees report, the Corporation confirmed as per Cabinet Directive to discontinue the supply of free electricity to the Directors and Executive Management of the Corporation. 6.2 P.P. 2011/2012 N0. 60.

Statement of Corporate Objectives of the Electric Power Corporation for the Period 2012 -2014: In order for the Corporation to successfully achieve its mission, the Corporate Plan of 2011 — 2014 establishes a framework to improve productivity and quality management practices and services. In order for the Corporation to provide reliable and affordable electricity to the nation, it is reflected with the objective of its Corporate plan the need to continue implementation of its Projects.

The majority of these projects are included under the Power Sector Expansion Project (PSEP), while some are funded by the Corporation. The Corporation has supported the overall national plan, the Strategy for the Development of Samoa (SDS) through the Community Service Obligation projects, previously known as the Rural Electrification Project. The Corporations involvement in these projects has realized the SDS’s vision of Qualify life for all.

6.3 COMMITTEE VISIT:

The Committee during its deliberation was able to conduct visitation to the following sites:

6.3.1 UPOLU:

Taelefaga:

Refurbishments of electricity generators have been completed and maintenance of these transformers is sufficient. But with considering complaints from the residents regarding a foul smell from the water, the Committee was unable to deal with this matter. There is reason to believe that this foul smell only occurs when the water is scarce at Afulilo due to the sun.

The Committee is of the view that there is a need to continue maintenance of these electricity generators for it allows for electricity to be generated and consumed by the districts of Aleipata, Lepa & Lotofaga, Falealili, Siumu, Safata, Lefaga and onto Tanugamanono.

Afulilo: Monitoring of the hydro for the generation of electricity is ongoing. However, there is a need to refurbish the compressor storage house that is used to produce oxygen to mix with the water to minimize the foul smell of the hydro.

The Committee is of the view that the Corporation should look into the (tilapia) reserve, for this is one of the benefits to the hydro.

Although there are plans for increasing the flow of water to this development, the Committee reckons that the Corporation should take note of this in order to deal with the scarcity of water during sunny season.

Lalomauga:

It has been almost 30 years since this electric hydro generator has been used, and the Committee had witnessed the sufficient supply of water for the production of electricity. There is a need to continue maintenance in order to sustain the proficient service provided to the nation.

Tanugamanono:

There is in place plans to use as a standby electricity generator to be connected with the Afulilo and Lalomauga Hydro. The Committee is of the view, that this electricity generator should be used as a standby for the National Hospital. There is also a need for refurbishment to be conducted for these electricity generators to be sound proof, as indicated in complaints from residents.

Fuluosou:

This was once used to generate electricity. The Corporation plans to use this site in order to control the consumption of electricity in Upolu and monitor impacts to other electricity generated sites.

Fiaga Diesel Power Station:

The Committee noted the sustainability of this development, as stated in its Statement of Corporate Objectives. Also noted that compared to the Tanugamanono Plant the progress of the site is reliable. In place are future plans for expansion of this development if there is a growing demand of electricity.

The Committee is of the view, that although with the current progress in the development, that the Corporation encourage the Private Sector to produce electricity from natural resources, in order to support the services provided by the Corporation. The achievement of this development will allow for an available option if there are any difficulties in the generation of electricity from the Private Sector.

6.3.2 SAVAII:

Salelologa Office:

Construction of a office is currently underway, for the selling of cash power, requesting of permits for installation of access to homes and a call in centre for general enquiries of the nation. Underway are plans for an additional quarter to accommodate Engineers in compliance with policies of work and safety of employees. As for the old quarters there are plans to refurbish for trainings and meetings of the employees, especially for morning prayers for protection of the employees daily.

The Feeders assisting with the generation of electricity throughout the island have been completed, but there are limited employees when needed to alter the transformers in order to provide sufficient services.

Currently there are no more complaints from the residents regarding the loud noise from the electricity generators and the diesel fumes.

There are in place seven (7) electricity generators.

Three (3) of which are being used, one is leased by the Corporation, and the remaining three

(3) are malfunction.

The Committee noted that, these electricity generators cannot generate the need for electricity throughout Savaii, especially during the festive season of Christmas of which there is a high demand for consumption.

The capacity produced by these electricity generators within 24 hours is only 2.8 megawatts where as the electric consumption needed is 2.4 megawatts.

The Committee identified the risk of not having backup if a emergency were to arise, given that all the electricity generators are currently being used. It is the view of the Committee that, there is a urgent need to purchase new electricity generators in order to minimize the money spent on spare parts.

Also there is a need to employee more people for the maintenance of the electricity generators.

Power outage during the festive season at the end of the year is ongoing problem. The Corporation Office in Savaii stated that the electricity generators cannot produce the capacity demanded for the whole Island.

Also noted, is that there are families who are still installing additional electricity used appliances to their homes and residence. This confirms that there are no visitation carried out by the Corporation to each family to assess whether or not families are complying with conditions of requested permits in order to monitor usage of electricity and the condition on which such permits were approved.

Within the final phase of complying the Committees Report, work has been carried out to have Salelologa as a sub-station to assist with the generation of electricity to the newly developed Power Station at Vaiaata.

23 Hydro Power Station — Vailoa Palauli River:

This river has been identified as a sufficient source. Given the data collected, it has been confirmed by the Corporation, the river is unable to generate sufficient electricity for the whole of Savaii, if compared with the capacity of 3 mega watts that is need to be generated throughout Savaii only 1 megawatts can be generated from this river.

Borehole in Falealupo:

The Committee also visited the Electrification of the Porehole Project at Falealupo, and it witnessed the risk of the water pumps being damaged due to the need of a new voltage regulator to be installed on the electricity post located close to the water pump, in order to control the unstable electricity. The Committee expressed the urgency for the Corporation to install one, in order to reserve Government funds that may be spent should the water pump be damaged.

6.4 LONG TERM PLANS:

The Corporation is still set on continuing its intended project of using the Sili River as a source for an affordable electricity production (Hydro). Despite past encounters with the village, the Corporation had prepared a new proposal to satisfy the village council and a monetary gift to offer for negotiations. The Corporation believes that, this is the only sufficient water source that will be able to generate affordable electricity for the whole of Savaii.

7. ACKNOWLEDGEMENT:

The Committee acknowledges the Board of Directors and the Management for all the hard work achieved in the fiscal year discussed. The Committee also recognized the ongoing services that the Corporation is able to provide in improving productivity, quality management practices provided to the nation. Also conveys its thanks in the consultation and negotiations conducted between the Corporation and various villages to resolve the unpaid electricity consumption.

The Committee also convey its thanks to the General Manager and the Management for the aural statements contributed during its deliberation, and also with the assistance during its visitation. Without their assistance it would not have been possible to compile its Report as well as an understanding in the importance of each Divisional contribution to the operation of the Corporation.

8. RECOMMENDATIONS:

Based on its Findings, the Committee recommends that the Government:

1. Provides priority assistance to the Corporation in the following Projects that aim to provide affordable electricity to the nation:- Solar Energy Wind Energy Solar Energy -Coconut oil -Patiki -Other plants Other hydro sources

2. Prioritises areas identified to the result of electricity wasted, so that in the two years to come there will be a decrease in electricity wasted.

3. Encourages Awareness Programs through television and radio in order to minimize complaints lodged due to unexpected power outage.

4. Complies with the Cabinet Directive to discontinue the supply of free electricity to its Directors and Executive Management.

5. Continues installing functional prepayment meters. Also recommends the Corporation to look into alternative brand (prepayment meters) to replace the current prepayment meters used, due to its malfunctions in order to avoid the problems of electricity being wasted, and to reserve money used in meter reading services and transportation used in carrying out these services.

6. Replace old diesel powered electric generators in Savaii with new ones, in order to avoid the continuous problems of power outage especially during the festive season at the end of each year.

7. Prioritize installation of a new voltage regulator to the electricity pole situated close to the water pump at Falealupo, to control the power used by the pump. By prioritizing the installation of the voltage regulator will preserve this Government asset from being damaged due to the unstable power and will be able to achieve the purpose for which it was installed.

8. Work in partnership with the Ministry of Natural Resources and Environment to reserve springs and rivers that are abundant for the generation of electricity.

9. RESOLUTION:

At the conclusion of its consideration the Committee resolved to recommend the Assembly to:

To approve P.P. 2011/2012 No. 60, Statement of Corporate Objectives of the Electric Power Corporation for the Period 2012 - 2014 & P.P. 2011/2012 No. 92, Annual Report of the Electric Power Corporation for the Financial Year Ended 30th June 2011. Tusa Misi Tupuola Chairperson