VZCZCXRO4130
PP RUEHKN RUEHKR RUEHMJ
DE RUEHKN #0137/01 3030106
ZNR UUUUU ZZH
P R 300106Z OCT 09
FM AMEMBASSY KOLONIA
TO RUEHC/SECSTATE WASHDC PRIORITY 2378
INFO RUEHKR/AMEMBASSY KOROR 0355
RUEHMJ/AMEMBASSY MAJURO 0469
RUEHC/DEPT OF INTERIOR WASHINGTON DC
RHHJJPI/PACOM IDHS HONOLULU HI
RUEHKN/AMEMBASSY KOLONIA 2747

UNCLAS SECTION 01 OF 02 KOLONIA 000137 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ENRG ECON PGOV PREL FM
SUBJECT: YAP STATE ATTEMPTS AT IMPLEMENTING ENERGY PLAN AHEAD OF 
NATIONAL PLAN, FUNDING PROBLEMS REMAIN 
 
REF: A. A) KOLONIA 130 
     ¶B. B) WEMHOENER-CUITE - NEVILLE E-MAIL 30/10/09 
 
¶1.  (SBU) SUMMARY:  Yap State Legislators are hoping that the 
FSM National Government can provide a unified front to obtain 
international funding to meet the FSM's energy needs.  Current 
funding from donor nations is greatly appreciated, but the 
project implementation process remains difficult.  End Summary. 
 
No Movement at National Level 
----------------------------- 
 
¶2.  (SBU) During an October 16 meeting, Yap Speaker and Chairman 
of the Legislative Standing Committee on Resources, Education 
and Development (RED) Charles Chieng told Econ/ConOff that Yap 
continues its work towards trying to switch Yap state to 75% 
renewable energy by 2020 (Ref A) despite inaction at the 
national level.  Chieng, and his Committee on RED Vice Chairman 
John Masiwemai, Floor Leader and member John E. Mooteb, and 
Member Joe Giliko, explained that on June 13, 2006, the 
legislature received a petition demanding that the state "do 
something about [skyrocketing] energy costs."  In 2006, the 
legislature reviewed the Yap State Public Service Corporation 
(YSPSC) operations and billing process and cut some costs, but 
the impact on consumers was limited.  At that point the 
Legislature recognized that it had to focus on finding other 
means, notably renewable energy such as wind and solar, to meet 
the state's energy needs. 
 
¶3.  (SBU) Mooteb stressed that to meet the upfront costs of 
installing renewable energy infrastructure Yap must rely on 
international donors.  He added that the committee members are 
hoping that with President Obama's commitment to renewable 
energy the Office of Insular Affairs will make alternative 
energy funding one of its goals.  Either way, reliance on fossil 
fuel is becoming "too expensive for the island" and a new source 
of energy is becoming a necessity. 
 
Plan Updated 
------------ 
 
¶4.  (SBU) When Econ/ConOff asked about the energy plan that Yap 
State submitted to the national government, Mooteb commented 
that they had heard no reply.  Mooteb then confirmed that the 
State will continue to push forward on its own plans, which were 
drafted by the YSPSC.  Giliko added that it is difficult for the 
national government to consolidate all of the state plans.  They 
are all different.  He agreed that some sort of consolidation is 
in the best interest of the nation.  Reiterating similar points 
as Pohnpei officials (Ref A), Giliko opined that currently each 
state is fighting for the same pot of funding instead of finding 
a common way forward. 
 
¶5.  (SBU) Later that same day YSPSC General Manager Faustino 
Yangmog repeated many of the same points that the legislators 
did.  He added that YSPSC revised the state plans to be less 
ambitious.  He stressed that the goals were all obtainable and 
worthwhile, but the initial timelines were too aggressive.  In 
addition to funding limitations, the original plan did not 
provide enough time to conduct comprehensive wind studies. 
Experts state they need at least a year to measure wind speeds 
in a given location in order to make a reliable analysis. 
 
¶6. (SBU) Yangmog acknowledged that the initial timeline was 
dependent on international funding that does not always come 
through as expected.  For example, he claimed that USDA denied 
Yap a grant for solar power investment because "there were no 
funds for non-Americans" and "the decision was made pre-Obama." 
Yap is updating its application, in consultation with USDA 
representatives, and will reapply.  The new timeline for 
investment in alternative energy sources will take into account 
such setbacks and the need for comprehensive studies before 
donors are willing to make substantial investments. 
 
EU Efforts Appreciated, but Complex 
----------------------------------- 
 
¶7.  (SBU) Yangmog and a specialist on solar power, YSPSC 
Contractor Victor Chemelmog, discussed at length the European 
Union's funding for solar power projects on outer islands (Ref 
B).  Throughout the discussion, both stressed their appreciation 
for the EU's funding and efforts.  They commented that the 
project will have a positive impact in the outer islands and 
that the EU Representative to the FSM Peter Konings is very 
responsive to their concerns.  They focused their discussion, 
however, on the difficulties and limitations they were facing. 
 
¶8.  (SBU) Chemelmog reviewed some of the technical issues he 
faces.  The equipment that reached the islands was not new and 
 
KOLONIA 00000137  002 OF 002 
 
 
was thus facing immediate problems.  There were also 
manufacturing mistakes that just cannot be repaired in Yap.  Due 
to the installation and manufacturing problems, the photovoltaic 
cells (PV) were not yet handed over to YSPSC.  The personnel in 
Yap cannot conduct major repairs, so until everything is up and 
running local technicians are not permitted to even touch the PV. 
 
¶9.  (SBU) Yangmog added that the YSPSC received letters from 
outer island inhabitants complaining that the YSPSC and EU had 
"lied" to them.  People were upset by delays or perceived 
unresponsiveness.  Some of the delays were due to multiple 
levels of bureaucracy.  Reviewing a recent example in which one 
mechanical piece failed on an outer island, Chemelmog and 
Yangmog cited the governmental, contractor, and subcontractor 
chain to obtain the needed replacement piece.  YSPSC, Yap State, 
FSM National Government, EU, and offices in Switzerland, 
Finland, Fiji, and Denmark were all involved in identifying and 
then procuring the one relatively inexpensive item.  Yangmog 
concluded that going through all these offices still did not 
include actually installing the piece. 
 
Comment 
------- 
 
¶10.  (SBU) Yap government officials appear focused on their plan 
and achieving their energy goals.  The officials acknowledge 
that they are dependent on international donors and openly 
appreciate the assistance, including through the Compact of Free 
Association.  The reliance on the international community has 
led to some frustrations.  The interlocutors' frustration became 
most evident when Yangmog and Chemelmog compared the EU solar 
project to the Compact.  They emphasized how two aspects between 
the two programs were similar.  First, Yap needs the funding and 
is appreciative for the projects that are funded.  Secondly, the 
bureaucratic requirements, be they funding request formats, 
funding directives, oversight requirements, reporting 
mechanisms, or other technical and legal demands often are 
beyond the capacity of the people on the ground.  Furthermore, 
the multiple levels of control siphons off a substantial portion 
of funds to people, offices, or other places rather than the 
project itself.  No one argued that oversight and control wasn't 
needed, but a desire for a simpler process for working with the 
international community was evident.  End Comment. 
DOUGLASSWD