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RELATED STORY:How some Pacific bases are reducing energy costs

YOKOTA AIR BASE, Japan — Japan’s considerable contribution to utility expenses on U.S. military bases may drop next year, U.S. Forces Japan officials say.

Under USFJ’s Utility Cost Sharing program, which is part of the special measures agreement, Japan is projected to pay about 71 percent — or roughly more than $206 million — of the bill for its 2006 fiscal year, which ends March 31.

That’s likely to change in 2008, according to Marine Col. Jay Sorg, USFJ’s logistics and installations director, who called the percentage breakdown a “hard target” for the Japanese, saying it’d probably be challenged when the current two-year deal is renegotiated sometime this summer.

Best-case scenario? The percentage falls a bit. At worst, the U.S. will have to pick up the tab for all utility costs. Either way, the military may be picking up more of the utilities tab in a budgetary environment already squeezed by the war and other financial considerations.

“We’ve got to do what we’ve got to do, no matter what the level of compensation by our host nation. Utilities always have to be paid,” said Air Force Lt. Col. Mark Harris, the current operations branch chief for USFJ’s logistics directorate. “It’s an easy target for them to go after, and we fully expect them to push hard for cuts to the Utility Cost Sharing program.”

Masaki Takaoka, a spokesman for the Ministry of Foreign Affairs’ Security Treaty Division, said nothing has been decided yet.

“In renewing the [special measures] agreement, the amount will be reviewed if necessary, while giving consideration to two aspects — Japan’s severe financial situation and keeping smooth and effective operations of the bilateral security system,” he said. “It is often misunderstood but the share is not determined by the percentage of the bill.”

Japan provides almost $1.5 billion annually to the U.S. military under the special measures agreement, Harris said. That includes about $1.1 billion for approximately 23,000 master labor contract employees who work on USFJ installations and another $12 million to $14 million in training relocation costs, mostly aimed at reducing noise burdens in heavily populated areas on Okinawa.

It’s normally negotiated every five years but the U.S. and Japan agreed to set the present deal at two years because of realignment talks, Harris said. The two sides began tracking data for it in 1992.

Both Sorg and Harris said funding for Japanese labor is relatively safe because the government generally doesn’t want to take away people’s jobs, adding that shifting U.S. training interests also remains a priority.

That leaves the Utility Cost Sharing program open to cuts, they said.

According to statistics provided by USFJ, Japan’s contribution peaked in 1999, when it paid all installation energy bills — which cover electricity, diesel fuel, natural gas, propane, kerosene, water and sewage.

Since then, the percentage assumed by Japan has declined steadily each year, Harris said. During that time, however, overall energy use on bases has essentially stayed the same, he added, despite an increase in facilities.

Harris said Japan’s shrinking budgets, a mid-1990s recession and commitments to U.S. forces realignment are major factors, but rising fuel costs the past five years could be the biggest reason for the downward trend.

He said Japan implemented “upper limits” for each of the seven utilities in 1996, putting caps on usage, not funding. Five years later, those were reduced by 10 percent and the U.S. also agreed to drop a program in which Japan paid the utilities of servicemembers and Defense Department civilians living off base.

Takaoka added that the annual upper limits for each utility are set in advance.

“The more electricity is used, the higher the military share will be, but if the power is economized, the share of the military will go down,” Takaoka said.

With budgets being tightened at every level of the military due to war costs and the need to buy new equipment, USFJ is very concerned it may have to shell out even more money for utilities.

“Any major decrease in Japanese funding has severe repercussions on our components,” Harris said. “A 50 percent cut would mean $100 million that has to come out of their budgets.”

Every May, USFJ compiles usage statistics in an Energy Conservation Report provided to Japan’s Defense Facilities Administration Agency, he added. Included are results of energy savings measures carried out by each base to help limit those costs.

According to the DFAA, Japan paid 24.9 billion yen, or $207.5 million, of USFJ’s utility costs for fiscal year 2005. The agency allocated 24.8 billion yen, or $206.6 million, for this year’s bill.

Harris said new proposals are developed at the Pentagon, State Department and Ministry of Foreign Affairs levels. He doesn’t participate in negotiations but usually attends as a subject matter expert on the sideline.

“This program by the Japanese is unmatched anywhere else in the world,” Harris said. “It’s extremely generous and we very much appreciate what they’re doing.

“There’s no crystal ball and I really have no idea what they’ll ask for. But basically, we don’t want it to go away, and we’re going to fight to keep it as fully funded as possible.”

Stars and Stripes reporter Chiyomi Sumida contributed to this report.

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