18TH ANNUAL PACIFIC POWER ASSOCIATION CONFERENCEStatement by Nikolao Iuli Pula, Jr.
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| 18th Annual Pacific Power Association Conference |
Good Morning, and Talofa, Ladies and Gentlemen:
It is an honor to be invited to speak at this 18th Annual Pacific Power Association Conference. It is both a privilege and a pleasure to address you this morning. This is my first PPA Conference and I am very pleased to be here - not only because this happens to be where I was born and raised and that it’s a beautiful and enchanting place (even with the rain), but the people are friendly, kind, respectful as perpetuated by their fascinating culture, generous, and down right outstanding! So, to our host utility, the American Samoa Power Authority (ASPA), Governor Tulafono, and the people of American Samoa – fa’afetai tele and thank you for having us here this week. I would also like to express my deep gratitude to the PPA Chairman Apii Timoti, Executive Director Tony Neil, and the whole organization for this wonderful invite. It is great to see some familiar faces and to meet many of you for the first time.
Before I continue on with my remarks, I’d like to share with you a quick knowledge of a Samoan exercise or experience which I’ve adopted as a Practical Proven Solution that works to keep you awake should you begin to fall asleep during my speech. I believe the Governor and a few others who have heard me give a talk before are familiar with this experience – so here it goes: It is simply known as the PATI & PO exercise – I’m going to have the audience compete with my fellow Samoans to show that it’s a Proven Solution that works.
Thank you for your participation, patience and understanding.
The theme of this conference – Sharing Knowledge and Experience for Practical Proven Solutions – is actually at the heart of what PPA is all about with all your utility active members, Allied members, Board Members, utility managers, engineers and suppliers. You play an important role in your countries and territories’ future and successful development. What is great about this theme is that the reputation and growing stature of your organization has gained regional and international recognition as the ‘voice of reason’ for utilities in the Pacific. That is clear by the presence of your many Allied Members and distinguished guests traveling far and wide to be here this week. As I looked over the Program, I took note of the various interesting and worthwhile presentations. Undoubtedly, besides the traditional fundamental mandate of utilities to provide reliable, affordable, and efficient power source to their communities – the buzz words in the air are Energy Crisis, Climate Change, Renewable and Alternative Energy, Energy Plans and Going Green.
I’m looking forward to hearing the presentations of Morey Wolfson from Colorado on “The Current Status of US Federal and State Climate Change Policies,” and Dr. Herb Wade, an Energy Efficiency Consultant, on “Reducing Fossil Fuel Imports for Generation – The Case for Renewables and Energy Efficiency” this coming Thursday.
While this is my first PPA Conference, the Office of Insular Affairs (OIA) in the United States Department of the Interior is not new to the PPA and its Conferences. Tony Neil, the PPA Executive Director, introduced PPA to us in 1999, and we have had a mutual relationship since. This is mostly because OIA supports the underlying aspirations of PPA – to provide the customers of its member utilities with affordable and reliable energy as essential elements of economic and social development.
For those of you who do not know, the Secretary of the Interior generally administers the U.S. Government relationship with four of its five territories, specifically Guam, American Samoa, the U.S. Virgin Islands and the Commonwealth of the Northern Mariana Islands. Puerto Rico is not in that portfolio. The Secretary also administers the financial assistance we provide to the nations in free association with the U.S., namely the Marshall Islands, the Federated States of Micronesia and Palau, under the Compacts of Free Association.
Energy Crisis: Global energy crisis with Islands States at the forefront
In 1970, the United States imported roughly 25% of its oil; today the number is between 60-65%. I know that the percentage for island governments fuel imports are even higher - close to 100%.
You are well aware of the energy crisis worldwide and in the Pacific region and it would be unnecessary for me to spew other facts. Suffice it to say, there are multiple economic, environmental, and security interests at stake. For those of us who live in small island states – the magnitude of the problems are even greater because of our size and geographic isolation. Our islands are fragile, and we are extremely vulnerable to global changes.
The Energy Crisis and the increasing dependence in imported fossil fuels has caused the Obama Administration to push for new and more comprehensive energy policies, with emphasis on renewable sources, for the United States. A critical component of this effort is the funding provided through the $787 billion American Recovery and Reinvestment Act of 2009, commonly referred to as ARRA or the stimulus package. ARRA provides $38.7 billion to the US Department of Energy to implement the Administration’s ambitious energy plan. Specific ARRA grants made available to the US territories include: American, Guam, Northern Mariana Islands, US Virgin Islands. These grants average between $25-30 million.
The Department of the Interior, under the leadership of Secretary Ken Salazar, also plays an essential role in the Administration’s energy plan. Immediately upon taking office, Secretary Salazar signaled a major priority shift in public lands management, increasing DOI’s focus on development of electricity created from renewable sources. As you may be aware, DOI manages one fifth of the country’s landmass and more than 1.7 billion acres offshore. Most of the US domestic oil production is on DOI property and opportunities abound in these areas for wind, solar, geothermal, wave energy, and other forms of renewable energy. Secretary Salazar said, “We have to connect the sun of the deserts and the wind of the plains with the places where people live.”
While our sister island states will not receive specific ARRA money, these freely associated states continue to receive millions of dollars for infrastructure development. Funds from other partners like Australia, New Zealand, Japan, China, and the European Union also provide assistance to the Pacific region. I also look forward to hearing from our friends from the World Bank, the Asian Development Bank and AusAid on Presentations by donor countries and multilateral aid agencies regarding their “Aid strategies in the Region with a focus on Energy” later today.
Five years ago at your PPA Conference in Fiji, in his keynote address, the Honorable Tom Roper noted, “that more than 1.6 billion people don’t have access to electricity and this number includes 70% of Pacific Island residents. Most of your fellow citizens can’t turn on the light.” I wonder if that percentage has decreased, and by what amount, five years later.
About two years ago, I decided to personally get involved with the energy crisis in the CNMI. The Commonwealth’s total government budget was about $168 million and it spent about $80 million for fuel alone that year. It was a sad and terrible situation. With the garment industry going from 37 factories to zero, and tourism – the other pillar of their economy – losing its steam along the way, many businesses could barely hang on which caused many of the residents exited to other destinations. About this time last year, the island of Saipan was immersed in a power crisis. The CUC could only produce 2/3 of required power production to meet customer demand. Rolling brown out schedules took effect, which at best would provide 16 hours daily for island residences and business. From time to time, the island would be completely in the dark for several hours as the remaining two out of eight engines at the Main Power Plant 1 failed. The Island residents would be claiming that CUC stands for ‘Customers Using Candles.’
Since the Spring of 2006 to the summer of 2008, OIA provided $9 million of capital funding to fund CUC power repairs. CUC requested an additional $4 million. OIA’s continued support to the CNMI and CUC to continually fund repairs was being tested. CUC had already spent $9 million and had very little to show for. On April 12, 2008 – CUC engaged the services of world re-known temporary power provider Aggreko International. Within 45 days of the contract, Aggreko delivered 15 Megawatts of temporary power, 24 hours of power service was restored to Saipan. The contract term was for 12 months, CUC’s plan was to use the 12 months to overhaul/repair PP1 generators.
In December of 2008, OIA stayed committed to the CNMI and CUC in efforts to overhaul/repair PP1 and approved the additional request of $4 million. On February 2, 2009, using the additional approved OIA funding, CUC engaged the services of Wallon Young (a former employee of ASPA) as its Deputy Director for Electric Power System Rehab to oversee the overhaul/repairs. In March 31, CUC re-commissioned engines 7 & 3 bringing 15 MW of power back on the grid. Before the end of August 2009, CUC will re-commission a third engine, increasing power production to another 5 MW. On August 31, CUC will place Aggreko on standby reserve and power the whole island on CUC power generation assets. Saipan’s PP1 had gone from a nadir of only having 2 out of 8 engines operational for 8 MW production in the summer of 2008 to 6 out of 8 and 37 MW of power production. Total CUC power generation assets in Saipan on August 31, 2009, will be capable of 55 MW of power generation to service 40 MW of peak load demand.
While I am pleased with the progress that CUC has made with hard work and a dedicated staff, I still remember the anguish, frustration, and pain of so many people in Saipan as they struggled through having inconsistent and, at times, no power. Families being uprooted and moved to other places, businesses closed down, and old sick people worrying about their dialysis machines being short circuited. The costs of those loses are hard to quantify at times. The health and economy of any place do rely on how well its utilities function, efficiently or not.
CUC’s success – going from power crisis to power stability is attributed to a close and cooperative working relation between OIA, the CNMI policy makers and CUC. If there is a will we can find a way.
With the addition of the Honorable Senator Utu Abe Malae/ Mr. Power to CUC, I believe the people of Saipan will appreciate reaping the fruits of his expertise, professionalism and drive. Good luck to your new calling sir.
Partnerships: Effective partnerships and sharing/ coordination.
Speaking of partners, my second point is effective partnerships to maximize the limited resources. Earlier this month, I was fortunate to be part of the US delegation to the 40th Pacific Island Forum Post Dialogue meetings in Cairns, Australia. Three of many issues raised were the economic crisis, climate change, and donor coordination. While listening to the distinguished leaders at the Forum and Post Dialogue, it became apparent that one objective was very clear; the desire and willingness to work together as a region to ensure that the peoples of the Pacific have the resources to face these global challenges and improve their livelihood. Not only should the islands collaborate in their efforts, but donor nations should also coordinate funding assistance to leverage their investment and create the most impact in the region. Not to mention, this type of coordination will promote greater accountability and transparency in government operations.
After reviewing the mission of the Pacific Power Association (PPA), and its work over the 17 years of its existence, there is no question that PPA’s objective is not any different than that of the Pacific Forum Leaders. While your task is specific to power generation, your goal is the same, and that is to eventually improve the quality of life for the people you serve.
While each of your areas has special and unique challenges, all of you face many of the same fundamental problems. Problems with energy costs, project management, revenue generation, manpower resources, training, political interference, and others, which is why I believe the theme of this conference is so appropriate, “Sharing Knowledge and Experience for Practical, Proven Solutions.” Sharing information amongst yourselves and discussing how to resolve mutual issues that severely hamper your operations will certainly be more meaningful and productive.
OIA has been supportive of many PPA programs in the Insular Areas and Compact Nations through our Technical Assistance (TA) and Operations, Maintenance and Improvement Program (OMIP) grants for several years. OIA is a partner of PPA! We believe that the Pacific Power Association is a valuable organization that has played, and will continue to play, a pivotal role in the development of our utilities in the Pacific region.
I believe this partnership has proven the effectiveness of sharing knowledge and experience through several projects like the Buddy System, the Micronesian Water and Waste Water program, and the Pacific Lineman Training project, which are funded under OIA’s OMIP grants. These projects prove extremely valuable and reduce cost by sharing island manpower resources, not much different from what you are doing here at this conference. My advice is that you increase your networking, collaboration, and take back what you learn this week and apply what is appropriate to your operations.
Benchmarks:
Our goal should be to build a diverse energy portfolio to the greatest extent and to lessen our dependence of foreign fossil fuels as much as possible. I recognize that this can be a daunting goal especially for heads of utilities whose current operations run almost entirely on burning oil. I am also aware that perhaps in the Pacific we may never eliminate importing fossil fuels. However, I believe you will all agree with me that we cannot continue to rely solely on imported fuels and that development of renewable energies is our only option to lessen our dependence on fossil fuels and to gain the highest level of energy independence. There will not be a single renewable energy substitute to solve our energy problems. What we need is a combination of different energy sources complementing each other.
We are all too aware of the impact that the cost of fuel has in the Pacific region. It cuts deep into every aspect of our economy and personal livelihood. It affects each of your operations. It is for these reasons that all of you have already begun moving in the direction of diversified and renewable energy sources. I know that most if not all the islands have implemented varying levels of photovoltaic solar panel systems and I commend you for that.
I would also like to recommend that you work with your leaders to develop an energy policy. If you already have one, take a good look at and ask, is your energy policy realistic, practical, and does it address your current and future energy needs? Does it address how to lessen dependence on fossil fuels? Does it address the research and development of energy sources? Does it include active collaboration with outside agencies and institutions to help find alternative solutions? These questions, when answered, should set your benchmarks and strategies to achieve our goal.
Renewable and alternative energies are very real and within our reach. We are blessed with the largest body of water surrounding our islands, sunshine year round, winds, and islands with volcanic activity that can be tapped for geothermal energy. We need to take advantage of our natural resources and to look seriously at harnessing these energy sources. While the cost of developing renewable and alternative energy sources may be prohibitive, the long term benefits outweigh the initial costs. With the various funding sources I mentioned that are made available to the islands, we can overcome many of these financial barriers. The momentum is also in our favor. The world community is moving in the direction of renewable energies and there are many places we can learn from and people we can partner with.
In trying different alternatives, we must always go back to the energy policy to ensure that it is harmonious with our very own island environments. Most islands, for example, would not sustain the chopping down of mangrove forests to establish wind farms. Again, we need to ensure that in our search for alternative sources of energy we do not destroy the very islands upon which we depend upon for our livelihood and identity.
In closing, I wish to raise a sober but powerful and meaningful question that was posed by Reverend Masalosalo, who is here with us today, at the end of Senator Liufau’s funeral this past Friday. Reverend Masalosalo’s closing remarks was directed at the Liufau’s widow – Sive. I am paraphrasing here, – the Reverend said to Sive – when all the testimonies, the sermons, the services, the cultural ceremonies and the many activities come to an end, then what? When all the families and friends and people are gone from paying their respects and you are left alone, then what? The Reverend then offered a spiritual message of Peace. He quoted Our Savior – “I give you peace, my peace I give unto you not as the world giveth but as I do . . . Peace be unto you.” The point being to all of us is – when we are done with this conference in the Sharing Knowledge and Experience for Practical, Proven Solutions” – then what? When we return to our different destinations with shared knowledge and experience – like the flock of birds disperse from a fishing grounds, and we each take back a fish – as Governor Togiola alluded to in his greeting message in the program – then what?
May this 18th PPA conference and Trade Exhibition be a successful one and may the joy and hospitality of these beautiful islands and its people bless you with their alofas.
Thank you.
Soifua ma ia manuia!