By Joy White

The islands face considerable challenges in providing quality utilities to their residents, ranging from aging or nonexistent infrastructure to securing adequate funding.

Despite many challenges, utility companies say there have been great successes and that they are optimistic.

Joseph Duenas

An overview of utilities in Micronesia

Many of the island communities are growing, in particular Saipan.

“The challenges facing the Commonwealth Utilities Corp. today are in some ways reminiscent of past boom and bust cycles that have impacted the island. However, the latest economic cycle appears to have significant growth, with the casino and tourist industries expanding rapidly along with resort and support communities for workers in the industry,” says Gary Camacho, acting executive director of the CUC.

The CUC produces an average of 11.5 million gallons per day of water and treats approximately 3 million gallons per day for a customer base of 8,139. In addition, the water and wastewater customer base is expected to grow over the next three to four years. 

Power demand across the island of Saipan is normally 30 megawatts per day with peak summer demand approaching 39.2 megawatts. 

Guam Waterworks Authority and Guam Power Authority are doing well financially and are continually improving internal operations and efficiencies, according to Joseph T. Duenas, chairman of the Consolidated Commission on Utilities. GPA and GWA are public corporations, and rates are determined by Guam’s Public Utilities Corp.  

“We’re doing very well for both companies. They’re well managed and operated and they’re doing very well financially,” Duenas says.

GPA and GWA are the only utilities of the U.S. territories that have investment-grade ratings from three rating agencies, he says. These ratings have allowed the agencies to sell bonds on the market to allow them to finance upgrades and projects.

Work began on Guam’s Agat/Santa Rita Wastewater Treatment Plant in 2016 to meet mandates from the Environmental Protection Agency. The plant will receive flow from southern Guam to include Agat and Santa Rita collection basins sewer connections, Cross Island Road and Baza Gardens.

The Marshalls Energy Co., which oversees power and water services with partner utility companies in Majuro and Ebeye, as well as providing power service to the outer islands of Wotje, Jaluit and Rongrorong, is overseeing major improvements in water, sewer and power infrastructure.

MEC provides power to 3,496 residences, 431 businesses and 131 government offices in Majuro. Over 80% of the residences have been converted from post-power use billing to pay-as-you-go cash power meters, which has significantly reduced debt owed by customers as MEC devotes 30% of cash power payments to repaying debt owed by customers.

Mark Waite

Thirty years ago, alternative energy options for power companies in small islands like the Marshall Islands was just talk. Today, the Marshall Islands capital of Majuro has two grid-linked solar arrays, and donor organizations are lining up to fund major new grid-linked renewable energy infrastructure for urban Majuro and Ebeye and several outer islands.

The number of water customers in Majuro is much lower with many illegal hook ups to the city water system on Majuro. Majuro Water and Sewer Co. provides salt water sewer services to 2,287 customers, while 965 customers have fresh water services.

Ebeye’s power and water utility, known as Kwajalein Atoll Joint Utilities Resources, has 1,264 cash power customers and 847 residential fresh water connections.

With the various donor-supported infrastructure projects either in motion or expected to come on line over the next couple of years, power, water and sewer services in the Marshall Islands are looking up.

Investment and investment planning is a significant issue in the region, a benchmark report by the Pacific Water and Waste Water Association states. Kosrae never had an investment project, and Southern and Central Yap completed their last investment project more than 10 years ago. Pohnpei Utilities Corp. completed its last investment project four years ago. Majuro completed its report in 2001 and has ongoing projects.

Water and wastewater

Water and wastewater challenges faced by the islands include meeting standards for quality and combating leaking systems and non-revenue water.

Data from the 2016 Pacific Water and Wastewater Association Benchmarking Report shows a need for Micronesian utilities companies to upgrade their water systems.

The report, which includes performance assessments from 2011 to 2015, states that urgent projects needed in the region include

• a $2 million water treatment plant upgrade in Pohnpei;
• a $1 million new water treatment plant in Yap;
• a $300,000 billing system in Kosrae;
• a $500,000 to upgrade Southern Yap’s treatment plant and metering.

Photo courtesy of Mark Waite RJE Global PTY Ltd. of Australia was contracted by the Chuuk Public Utilities Corporation for $12 million to construct a new power distribution system on Weno.

A six-year, $19.1 million revamp of Ebeye’s antiquated fresh water and sewer system started last year with funding from the U.S. Department of Interior, Australia and the Asian Development Bank. “The sewer system was given a rating of ‘black’ [the most serious condition] because it is non-operational and the presence of raw sewage is a public health issue,” a U.S. Army Corps of Engineers evaluation of Ebeye infrastructure in 2010 states.

“For the last five years, raw sewage from the collection system has been directly pumped into the lagoon without treatment,” the evaluation states. On fresh water systems, the Corps of Engineers says, “The water distribution and production system do not have enough capacity nor pressure to support the population. Water is rationed and is currently being distributed twice a week for durations of 45 minutes. There is a lack of spare parts, pumps, and one of three reverse osmosis (water-making) filtration units is non-operational.” Although the water picture has improved since this 2010 report, the ongoing sewer and water overhaul is urgently needed and long overdue.

In the Federated States of Micronesia, Chuuk Public Utility Corp.’s newly refurbished wastewater sewage plant has been operational for 12 months. The state’s water wells have also been refurbished.

Some $4 million in Chuuk State compact infrastructure funds went to upgrades to the wastewater system, while $1 million in upgrades to the water system was funded by the Japan Fund for Poverty Reduction, a program funded by the Japanese government to provide grants for projects supporting poverty reduction and related social development activities that can add value to projects financed by ADB, according to the bank’s website.

“We are now operating 24 hours a day. Before the investment service was intermittent and unreliable,” says Mark Waite, CEO of CPUC.

CPUC has 600 connections for water services and hopes to expand. A barrier to expanding the number of connections is that many people still rely on natural sources of water, including rainwater and shallow water catchment.

Photo courtesy of Kwajalein Atoll Joint Utilities Resource

Photo by Hilary Hosia
(Above) A reverse osmosis unit was expected to arrive on Ebeye Islands in late February as part of a $19.1 million water and
sewer improvement project. (Below) The Marshalls Energy Co. in Majuro has six million gallons of fuel storage capacity, the
largest bulk fuel facility in this part of the Pacific. The tanks have experienced severe deterioration in recent years and plans are in
motion to renovate the tank farm.

Cost recovery for water and wastewater operations has been a challenge for the CPUC, as cost recovery is not at 100% and at the moment power operations support the water and wastewater, Waite says.

The CPUC is looking to improve efficiency in its water and wastewater operations to reduce cost and may have to consider increasing the charges for water and wastewater services over the next three to four years.

In the NMI, the CUC has improved delivery to 81% of its customer base in December, and strives to meet water service demand to customers 24/7, Camacho says.

The agency’s goals for improving the water system include

• improving leak detection of the distribution system to reduce water loss and increase water supply capacity, and addressing unaccounted for or non-revenue water that is a result of both water produced and water billed;
• addressing meter consumption accuracy issues due to meter failures, theft of water, and unknown connections from the early days of the system;
• making continuing progress to address all of the remaining action items associated with Stipulated Order #1.

“CUC has made significant strides to complete the list of action items called for, however, completion of the Water and Sewer Master Plans is a major item of concern that will require real work to complete, despite having conditional approval of the final draft document,” Camacho says.

Improvements to the CUC wastewater system include

• expanding the use of equipment for flushing, cleaning and televising to monitor and capture pipe conditions throughout the system. Potential issues include collapsed mains, tree roots and pipe deterioration due to hydrogen sulfide buildup;
• anticipating the increased wastewater flows coming as a result of economic growth. “[CUC will need to] begin planning for the next plant expansion at one or both wastewater treatment plants, Camacho says.

The continuing issue for Guam Waterworks Authority is meeting Safe Drink Water Act and Clean Water Act requirements mandated by the Environmental Protection Agency through a court order. To meet these requirements, the agency is assessing 30 water tanks and constructing or rehabilitating facilities.

The CCU is selling about $650 million in bonds to meet these requirements and complete other projects, Duenas says.

GWA is also working to address issues surrounding non-revenue water, which is water that is expended but not paid for. Non-revenue water results from leaking storage tanks and pipes, non-functioning water and theft.  In addition, Guam’s underground water infrastructure in some areas is layered where GWA built infrastructure atop older water infrastructures built by the military, and due to poor record keeping GWA may not know of these pipes. The infrastructure may not have not been receiving maintenance for many years. In time, GWA will standardize the whole water system, Duenas says.

About 53% of water expended is non-revenue water, Duenas says. The goal is to decrease the amount to 20% to 30%. The CCU estimates that about $5.3 million is lost from non-revenue water. To address the non-revenue water issue, GWA is replacing all metal storage tanks to concrete tanks.

GWA is also upgrading Guam’s sewer system and improving wastewater treatment methods and facilities. The Northern Wastewater Treatment Plant is being upgraded with the help of Department of Defense funds for the military buildup.  GWA broke ground in 2016 on improvements to the Agat/Santa Rita Wastewater Plant, a $54 million undertaking.

EPA is requiring secondary treatment of wastewater for Guam, as the island is currently using advanced primary treatment.

While the issue of wastewater treatment in the northern treatment plant will be funded by DOD, the Hagåtña wastewater treatment facility may not be upgraded for a while. Duenas says the CCU is hoping to work with EPA to delay the deadline to upgrade the system in 25 years.  By this time, CCU hopes to be able to pay off existing debt from the 2008 bonds to afford additional upgrades.

“Ratepayers can’t afford to borrow anymore,” Duenas says. “[…] We’re at the point that we can’t acquire any more debt. We have to consider affordability.”

Palau is faced with issues of its sewage system exceeding its capacity.

The Palau Public Utilities Corp. has commenced on a $17 million project to strengthen the transmission main from Airai Water Treatment Plant to Ngerkosowaol service tank. The project will also include the construction of  a new Malakal tank, the replacement of aging asbestos-cement pipes and the installation of new pipelines.

Work is also expected to start on Palau’s  Koror-Airai Sanitation Project. The PPUC on Oct. 21 signed two contracts for sewerage network, which were to start in January. The work is funded by an Asian Development Bank loan of $28 million.

Progetti Plant of Italy and Pacific Engineering Projects Ltd. of New Zealand signed the contract agreements to begin construction work for two of four major components of the sanitation project.

Progetti Plant was awarded sewer network rehabilitation and expansion work in the Malakal and Meyuns areas, while Pacific Engineering Projects was awarded the contract for sewer network rehabilitation and expansion in Koror.

New hotels being constructed are no longer allowed to connect to the main sewage system and are required to build their own holding tanks.

In the Marshall Islands, the U.S. government is funding preparation of a 20-year strategic development plan for Majuro Water and Sewer Co.’s struggling fresh water and sewage systems. This includes options for fixing a sewage system and outfall pipe that has been broken for decades, spewing untreated sewage onto the reef that is then spread along reef areas used by local residents for fishing and swimming for miles down current.

Power generation and distribution

Power generation and distribution in Micronesia is improving gradually.

CPUC in Chuuk is nearing the completion of a $12 million investment for a new power plant and distribution system on Weno, the state’s capital, which is expected to be completed by May 2017.

The contractor for the power plant is RJE Global PTY Ltd. of Australia. The project was funded through Chuuk State compact sector funds and a loan from the Asian Development Bank, which the agency is repaying.

“The power business is now commercially viable with full cost recovery,” Waite says.

Once the facility is complete, the next step is to expand services across Chuuk state, as only 27% of the state has coverage. The CPUC has 1,800 connections for electricity in Weno, Waite says.

“We’ll be rebuilding the power distribution in Tonoas south of the main island later in 2017, and we’re undertaking an investment master plan, funded by the World Bank, to map out service provisions to all the unserved islands in the state. Once the master plan is complete, we’ll have a clear idea of how much it will cost to deliver electricity across the rest of the state in a sustainable manner,” Waite says.

Implementation of the investment master plan is expected to take four to five years, and the agency will source funding for the projects from development partners and the private sector.

Photos by Ongerung Kambes Kesolei
Construction continues in Koror as the Palau Public Utilities Corp. works on projects to improve water and wastewater systems.

The CPUC expansion will be designed to include a high level of renewable energy through solar power in order to achieve the state target of 30% generation by renewable energy. Currently power in Weno is generated by a combination of diesel and solar power with only 2.5% coming from solar.

Following the devastation of Typhoon Soudelor in August 2015, the CUC in the NMI has spent considerable effort in rebuilding the power distribution system.

“That effort, the savagery of the event, the importance [that] power plays on the island as well as water and sewer, took a monumental toll on the utility,” Camacho says.

The success of the CUC following the typhoon was made with the assistance of other utility companies from Guam, Kosrae, Palau, Pohnpei and Yap, as well as Primary Source from Colorado.

Efforts continue, as the CUC works to install 700 concrete poles and install new transformers to upgrade and downsize temporary transformers that had been used to reestablish power across the island.

In addition, CUC has plans to improve its power systems. “Power systems require significant lead time for planning, scheduling and timing when the current reserve power available at the plant should be expanded to anticipate and assure users that CUC is prepared to meet their electrical service demands,” Camacho says.

CUC’s focuses for power system improvement include

• installing one new 8-megawatt engine to replace an engine at one of its power plants;
• hiring a consultant to support the one new engine installation and assist with authoring a new RFP for securing five additional engines and expand the plant for planned growth requirements;
• completing the installation and closure of work around Stipulated Order #2 that involved a new pipeline and storage tank for the power plant.

Guam Power Authority also struggles with power generation, as the island’s power plants age. Cabras 1 and 2 are two or three generations behind, Duenas says, and are due for replacement.

GPA has a capacity of 355 megawatts, with efforts ongoing to increase generation by 40 megawatts with two units in Dededo and to replace Cabras 3 and 4, which were severely damaged in August 2015 by an explosion.

GPA is working to improve the alternative renewable energy aspect of power generation.

Due to the tendency of intermittent rain and cloud cover, the energy farm in Layon has not been as successful as initially hoped. The energy farm struggles to produce energy at a steady rate. Currently GPA produces 25 megawatts while 12 megawatts are generated from the private community.

“The problem is renewable energy is still evolving. It hasn’t reached the point where its reliable, robust and economical enough,” Duenas says.

The next phase of GPA’s renewable energy efforts will include a requirement that contractors include energy storage to alleviate intermittency in energy productions.

A $20 million to $30 million plan for outfitting Ebeye with a massive solar panel “farm” to produce 40% of the island’s power now generated by diesel engines, as well as shifting Wotje, Jaluit and Rongrong islands from diesel generators to 95% solar power, is in progress. If this comes to fruition, it is estimated it would save the government utility company between $2 million and $3 million annually on diesel. The United Arab Emirates Abu Dhabi Fund for Development has approved an $11 million low-interest loan for this solar project, with the World Bank reviewing a larger investment in the solar plan.

In the meantime, the Marshalls Energy Co. is preparing to purchase two new 2.5 megawatt diesel engines in the near future to give it backup power generating capacity it now lacks. The challenging power supply situation was worsened in mid-February when a fire damaged one engine in MEC’s power plant, reducing the number of working generators to four — from seven previously available.

The four original 2.6 megawatt engines in MEC’s original power plant were installed in 1982, and two are not currently in operation. “New engines will be more efficient, so we’ll save on fuel costs to operate them,” says MEC CEO Jack Chong Gum, who added the utility is applying to the U.S. Rural Utilities Service for funding for the engine purchase.

— Marshall Islands Correspondent Giff Johnson and Palau Correspondent Bernadette H. Carreon contributed to this report.