Majuro Marshall Islands – Generators years overdue for overhaul a "leaking" distribution system that lost $3.4 million in 2008 and overall losses of $14 million in five years. That is the state of the Marshalls Energy Co. the government’s Majuro-based power company that is facing its greatest challenges since it was established in 1986.

Marshalls Energy Co. new General Manager David Paul warned the monthly Marshall Islands Chamber of Commerce meeting at the end of September that power service for the foreseeable future will be unpredictable because no one knows how long the under-performing engines can continue running before they break down.

"I don’t want to panic anyone but the assessment from our mechanical engineers is that the big engines in the new power plant could go tomorrow next month or in six months " said Paul who until he was hired by MEC in August had been ExxonMobil’s field manager for the Marshall Islands and the Federated States of Micronesia for four years. "I don’t have a crystal ball. But we’re aggressively working to get parts in and the generators overhauled."
Speaking to the parliament in a specially convened session to brief national leadership on Oct. 6 Paul estimated the power plant’s engines will need at least $6 million – which MEC does not have – to effect the engine overhaul needed. But millions more will be needed for distribution system and tank farm upgrades.

Because of high losses from 2005 onward MEC has had little money for maintenance having to obtain repeated subsidies from the government just to purchase diesel to keep the lights on in the capital. "We are working on a comprehensive recovery plan " said Paul in an interview. The plan focuses on completing a detailed assessment of needs with recommendations for moving forward.
He outlined the challenges this plan intends to meet:

• Power generation: Majuro’s two plants are supposed to have a combined generating capacity of about 24 megawatts but are actually capable of producing only slightly over half that. With two engines at the old plant still out of commission from a fire in 2006 the other three underperforming and the two bigger engines at the newer plant well-overdue for major maintenance also under-performing MEC now has a generating capacity of only about 15 MW.
The big engines need major overhauls but can’t be shut down because they are essential to meeting power demands in Majuro. "If they continue to run without repair and overhaul they will eventually die " Paul said. Meanwhile presently they are running "inefficiently burning fuel without getting the power they should be producing."

• Distribution system: MEC’s transformers and lines are old and this part of the system is showing massive losses. During 2008 nearly 25% of all the electricity generated by MEC and pumped into Majuro’s grid was "lost" in the distribution system. MEC distribution staff is doing the same assessment of its system as engineers are doing on the engines to identify existing problems what needs to be done and the cost he said.

• Tank farm: A review of possible leakage as well as the thickness of the metal for each of the eight 750 000 gallon tanks is soon to happen. A U.S.-based company now in Majuro to do a similar assessment on the Mobil gas station is being engaged to do similar work for MEC. This move said Paul will save MEC money because the technicians are already on island. Core water and soil samples around the tanks will also be analyzed.

"Once we’ve done the assessment with recommendations we can go to the government the United States and other donors and say "here’s our recovery plan ‘" Paul said. "We need a concrete plan in place to attract funding."
The government has already requested the Asian Development Bank to provide $3 million to assist with repairs needed at MEC. ADB is in the final stage of approving the grant request according to Manila-based officials. This funding will pay for pre-paid electric meters to be installed for Majuro a move Paul hopes will reduce the utility’s more than $5 million in accounts receivable for power.

MEC has also asked the government’s cabinet to approve raising its electricity tariff by 7 cents a kilowatt hour across the board an approximately 25% jump if approved to align the tariff with actual costs to produce power.
In the meantime businesses and other consumers are like Paul keeping their fingers crossed that MEC will be able to avoid a looming power generation crisis and maintain reliable delivery of power to Majuro.