KOROR (Palau Horizon) — Anticipating a shortfall for the next two years, Palau Public Utilities Corp. is seeking an annual government subsidy amounting to $800,000.
PPUC Chairman Roman Yano said the subsidy would enable the corporation to maintain the current power rate.
PPUC earlier announced that it would increase the power rate by a cent on April, another cent on July 1 and a third cent beginning Sept. 1.
PPUC says it needs additional funds for the expenses of three power plants in Peleliu, Angaur and Kayangel.
According to the analysis made by the corporation, the operating costs for the three power plants will likely exceed $600,000 in fiscal year 2003.
PUC also expects an annual revenue shortfall from $550,000 to $600,000 during FYs 2002 to 2004.
PUC would likewise need funds for inventory of parts and purchase of fixed assets and capital improvement projects, which cost $400,000 to $500,000 a year.
“With that level of shortfall in operating the three outlying state power systems, PPUC has no other alternatives but to seek government subsidy of some $600,000 to $800,000 a year in order to keep the same electric base rates,” Yano said in his letter to President Tommy Remengesau.
PPUC also suggested the lifting of fuel tax on the fuel it purchases.
“This tax relief could be used to meet most of the anticipated shortfall and reduce the subsidy being requested from the national government,” Yano said.
