Friday, July 18, 2008

GPA Bills May Increase

Power bills may increase:
GPA wants another fuel surcharge hike
By William B. Martin Jr.
Pacific Daily News • July 18, 2008

Plan to find a way to reduce your spending in the next few months so you can pay higher power bills.

The Guam Power Authority asked the Public Utilities Commission in June to approve an increase to the Levelized Energy Adjustment Clause, or fuel surcharge, portion of customer bills. It once again cited rising fuel costs as the reason behind the increase.

If approved, Guam residents can expect to pay an additional 7.3 percent of their total bill, or about $17.33 on an average 1,000 kilowatt-hour monthly consumption rate, the commission docket states.

Simon Sanchez, chairman of the Consolidated Commission on Utilities, said that, if passed, the increase would push the fuel portion of power bills to about 75 percent.

"We all see the prices at the pump," GPA General Manager Joaquin Flores said. "We must all be aware of how volatile (the oil market) is right now."

The adjustment proposal comes a little over a month after an emergency LEAC adjustment hit islanders' wallets to the tune of a 10 percent increase.

Flores said the June adjustment was an emergency measure to recover fuel costs lost over the previous LEAC cycle, while the proposed increase is the result of a "mechanical" review process that takes place every six months.

Sanchez said the adjustment is designed to account for another six months of fuel purchases.

"The hope is when you make these fuel cost projections," he said, "it will hold six months, unless the (fuel) market goes crazy again."

Acting Gov. Michael Cruz yesterday signed a loan document for the government of Guam to settle its $13.8 million streetlight debt to the Guam Power Authority.

The debt caused the power authority to begin disconnecting village streetlights earlier this year, prompting the Guam Legislature and administration to pass legislation to borrow money to pay off the debt.

"We're closing a chapter -- hopefully -- in our history that really needs to be closed," said Cruz.

The payment will offset a 2- to 6-percent base rate increase to customer power bills that would have gone into effect last month. If the debt hadn't been paid, the increase would have gone into effect this year instead of next year.

Sanchez said the payment also will take some $5.3 million off the top of fuel costs, which, if not recovered, would require an even higher fuel surcharge increase.

Flores reminded Cruz and other government officials that a shortfall still exists in the payment of current streetlight operations and will need to be addressed or the problem will arise again.

Bureau of Budget and Management Research Director Bertha Duenas said there is a provision in Public Law 29-85 that allows General Fund money to be used for this fiscal year's shortfall -- around $1.2 million -- but questioned why lawmakers didn't allow the provision for future years.

"Why don't we just do everything as we should in one bill?" she asked.

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