Pacific power companies band together to cut fuel costs

Cash-strapped electricity companies in the Pacific islands plan to join forces to cut the high fuel costs which are making it difficult for them to stay afloat, officials said.

The Fiji-based Pacific Power Association is tackling the problem through a plan for joint fuel-buying to lower costs and by reducing electrical distribution losses which cost power companies huge amounts of money.
Power Association (PPA) executive director Tony Neil said in the Marshall Islands capital Majuro that island utility companies likely would save money by banding together to buy fuel in larger quantities.

Because they separately purchase relatively small amounts of fuel from oil companies, they pay more than larger consumers. Most islands are heavily dependent on diesel generators for electricity.

PPA chairman and Marshalls Energy Company (MEC) general manager William Roberts said in an interview this week that fuel costs eat up an average 70-75 percent of the operating budgets of Pacific utilities. For the smaller islands in the region, it’s higher, he said.

“In 2000, fuel costs amounted to 65 percent of MEC’s operating costs,” Roberts said.

“Last year, fuel accounted for 83 percent of our operating costs.”

Energy Daily