KOROR, Palau — The Palau Senate is investigating potential financial difficulties at the Palau Public Utilities Corporation (PPUC), following reports suggesting the corporation could be facing bankruptcy.
A press release issued by the Senate on May 26, 2024, stated they are examining reports and statements concerning PPUC’s financial situation.
“The Senate seeks full cooperation from all relevant parties, including PPUC and the Palau Energy Administration (PEA), who may possess information regarding PPUC’s operations and related concerns,” the release said.
On May 1, 2024, PPUC CEO Frank Kyota sent a letter to both houses of the legislature requesting specific policy changes. These changes included the repeal of a provision in Title 37 of the Palau National Code (PNC) that restricts PPUC from charging water rates to residents of outlying states. Kyota argued this change would allow PPUC to “recover the cost of providing that service” and generate revenue for water system projects in those areas.
The letter also requested five additional amendments, including one that would allocate $5 from the Pristine Paradise Environmental Fee (PPEF) to water infrastructure and quality improvements in Kayangel, Peleliu, and Angaur.
Kyota stated in the letter, “PPUC cannot continue operating under the current conditions and remain financially viable. Recent legislation (RPPLs 10-19, 10-26, 10-42, 11-31, and 11-32) has negatively impacted PPUC’s ability to fulfill its statutory obligations and may have inadvertently contributed to its potential bankruptcy.”
A concern highlighted in PPUC’s financial audit reports for the fiscal years ending September 30, 2020 and 2021, is that both the Water and Wastewater Operations and Electric Power Operations have been experiencing operational losses. These losses reportedly resulted in a company-wide deficit exceeding $10 million by September 2021.