October 21, 2013

By Chuuk Public Utilities Company
The Kaselehlie Press

A number of investment projects are underway to improve operational efficiency for power, water and sewerage. CPUC is gradually improving its financial position, the return to 24 hour power, improvement of water and sewer services and overall efficiency improvements all contribute to this improving position.

There are many challenges facing the ongoing recovery of CPUC, of note are long overdue obligations to Banks and National Institutions, these will start to be addressed by CPUC in FY2014,

On the technical side CPUC is investing in power distribution improvement, power plant rehabilitation, sewer treatment plant rehabilitation and other capital projects to continue to improve the quality of utility service and quality of life for the citizens of Chuuk. Plans for the expansion of service across the state are being developed and CPUC is taking the lead in coordinating activities to ensure that energy policy and action plans are carefully thought through.

Effective 1st November 2013 Chuuk State Government is imposing a service tax on all of CPUC services. Under the Chuuk State tax law CPUC is obliged to collect the tax on behalf of the State and pass it on. When asked whether this a good thing for CPUC, CEO Mark Waite commented that the board is quite clear that "..We (CPUC) must act in accordance with the law, as such our opinion isn't relevant - there has been some opposition to the imposition of the service tax on CPUC services, this was dealt with by due political process and now the law is clear that the tax is payable by CPUC customers. If CPUC doesn't collect the tax on behalf of the Government we would be jeopardising the recovery efforts made over the last three years".

"The impact of the tax on CPUC sales is not known - it may be that we suffer a reduction in CPUC sales as a result - as a service provider we need to remain aware and flexible and focus on our main task of improving CPUC efficiency for the benefit of our customers".

In discussion with the Chuuk State tax office CEO Mark Waite has suggested that a portion of the revenues generated from the tax could be used by the State Government to fund the purchase and implementation of more efficient appliances in Government buildings - this would address the demand side energy efficiency initiatives contained in the Chuuk State Energy Action Plan and would have a positive impact in reducing the State power bills - this would then release State funds for other important purposes.