PUC cuts off power to FSM Telecommunications Corporation over a long disputed bill

By Bill Jaynes

The Kaselehlie Press

February 8, 2018

Pohnpei—Over three weeks ago Pohnpei Utilities Corporation turned off the power to FSM Telecommunications Corporation’s headquarters in Pohnpei after FSMTC refused to pay a bill they have been disputing for several years.  Last Friday PUC turned the power back on after the two agreed to what PUC General Manager Nixon Anson called a “mediation process” in a letter to the Kaselehlie Press.

The power bill in question involves only the power bill for the Pohnpei headquarters of FSMTC.  PUC did not shut down the power for other FSMTC operated locations such as cell phone towers and ADSL cabinets.  The billing dispute did not extend that far.

FSMTC Chief Financial Officer Rodelio Pulmano said that PUC presented a bill for approximately $170,000 which included approximately $126,000 that FSMTC has long insisted that it does not owe.  Approximately $44,000 of the total of the $170,000 was for the current bill which they immediately paid as they do each month.  Pulmano said that FSMTC’s average monthly utility bill is $45,000 to $50,000.

PUC officials declined to comment.  The Kaselehlie Press had scheduled an interview with Mr. Anson but when the appointed time arrived, Anson was not in the office.  Instead his Executive Secretary delivered a letter to us saying that he was “concerned that KP might misstate things that will affect both PUC and FSMTC during the mediation process.”  Anson said in the letter that he was aware that we had interviewed FSMTC officials about the situation but that PUC would not be making any comment.

Pulmano said that during the Pohnpei power crisis beginning in about 2013, PUC was forced to ration power delivery island-wide.  During that time FSMTC was forced to run its generators in order to continue to provide telecommunications services.  He said that PUC charges Telecom based on a formula it uses for customers it has classed as industrial customers whether the customer actually uses the power or not.  At the time of the power crisis PUC was not delivering the power for which they continued to bill PUC.

Pulmano said that when it became obvious that the power crisis was not going to be quickly resolved, FSMTC bought its own separate power meter.  He claims that PUC employees verified the accuracy of the meter after it was installed and that from that point forward FSMTC began making payments based on the meter so that it was paying only for power that PUC was able to deliver and disputed any PUC bills for power that was not delivered.  They were forced to pour the rest of their power budget into diesel fuel for their own generator.

Before PUC turned the power back on last Friday, FSMTC paid PUC an additional $25,000 under protest.  Pulmano said that since during their annual audits Deloitte and Touche never required FSMTC to book the disputed amount as a liability, they didn’t know where to book the $25,000 payment they made since the payment would not be offsetting a liability.

Pulmano said that lawyers are currently doing research on the legality of the disputed PUC billings.  When asked if FSMTC has the financial wherewithal to pay the disputed amount if that is determined to be legally necessary, he said that it has the resources to do so but that FSMTC is not interested in paying for services it didn’t receive. 

It would not mean bankruptcy for FSMTC as some on social media have claimed.

A person posting on social media also posited that FSMTC shut off all of the phones at PUC in “retaliation” for cutting off their power.  FSMTC CEO Fredy Perman said in email that there was no “retaliation”.  The shut off procedure is computer automated for customers who are in arrears of 60 days or more.  For a limited time, landline customers who are in arrears can receive phone calls but cannot dial out until their bill is paid.

Perman wrote that the shut off of the phones at PUC had nothing to do with PUC sending line men with long “hot sticks” to shut down the power at FSMTC on January 15.

“We will continue to work with PUC to sort out the dispute issues,” Perman wrote.

It seems likely, though lawyers will have to clarify, that since PUC shut down power for 16 days, PUC will not be able to charge FSMTC for the time that PUC physically shut down power delivery during the last three weeks.  If Pulmano’s quotation of average monthly utilities cost is correct it seems to mean a loss of $22 to $25 thousand for PUC, the amount that FSMTC paid PUC under protest.

Since PUC’s General Manager decided to “bow out of the interview scheduled for 9 AM today”, we were unable to ask them any clarifying questions as we had intended to do.