Palau Energy Administration’s (PEA) authority is being expanded to regulate water and wastewater rates under the proposed House bill 11-50-5S, HD1. It is also proposed to be transferred to the Ministry of Finance. It has passed 3rd reading in the House of Delegates and transmitted to Senate for their deliberation.
The bill is said to be part of the Policy-Based Loan conditions from the Asian Development Bank and will include capacity building and technical assistance to the current PEA.
The purpose of this change is to “incorporate PEA’s regulatory oversight into the water and wastewater sector to create a sustainable PPUC that is able to recoup its operating costs and provide high-quality services to all of Palau’s residents.”
It also places PEA within the Ministry of Finance as a “rate-setting regulator”. The bill says that MOF “has the capacity to support PEA, authorize access to key financial data, and more seamlessly assesses the sustainability and capacity of PPUC.”
This would mean that anytime PPUC wants to change the water or sewer rates, it will need the approval of the Palau Energy Administration. Like energy, if PPUC wants to get into a major business contract with another company, it will require approval and review by the PEA.
“PPUC shall submit to PEWA (Palau Energy Water Administration) for review any contracts that finalize agreements resulting from major business negotiations. Such contracts may not be signed by PPUC unless PEWA approves the contract.” (By: L.N. Reklai)