Wednesday, February 03, 2010

Utility upgrades: Who will foot the bill?

Utility upgrades: Who will foot the bill?

Friday, 29 January 2010 00:42
by Tiffany Sukola | Variety News Staff

PUBLIC utilities officials are ready to move forward with critical system upgrades in order to prepare the island’s infrastructure for the population spike associated with the military buildup; however, agencies are still unsure as to who will foot the bill.

“We know what needs to be done and now we just need to figure out where to get the money,” said Consolidated Commission of Utilities chairman Simon Sanchez during Wednesday’s hearing at the legislature on the draft environmental impact statement.

Officials from the Guam Power Authority and the Guam Waterworks Authority outlined the critical projects that must be completed before the thousands of marines and their families arrive on Guam.

Sanchez stressed the importance of moving forward with these projects because if the critical upgrades are not made before the realignment of the Marines and their dependents, then Guam’s utility and water systems face being overtaxed.

But although the military draft impact statement has identified where Guam’s power, water and wastewater companies should make repairs to their systems in order to handle an accelerated population growth, it doesn’t identify a funding source.

According to Sanchez, the utilities companies want the Department of Defense to absorb any direct or indirect upgrade costs because current users shouldn’t have to pay for the burden of upgrading systems because of new users.

Sanchez said that even though upgrades would have had to be made eventually, with or without the buildup, agencies have to deal with the pressure of upgrading its systems at an accelerated pace.

According to GPA general manager Kin Flores, an estimated $200 million in upgrades is needed in order to handle the increased demand on the island’s power systems.

Flores said that the impact statement recommended GPA recondition several power units, and refurbishes five of the island’s CTs, or current transformers, and make upgrades to the Orote plant.

He added that the study also identified long-term solutions to ensure the power authority will be able to sustain the island’s needs post-buildup.

GPA will determine whether it will pursue building a new plant, much like the one at Cabras, or build a plant at Potts Junction.

GWA faces similar problems, as the controversial document urges waterworks upgrades worth an estimated $300 million.

According to Julie Shae, of GWA, the company will have to make upgrades to waterlines near the marines’ housing units.

However, the environmental impact statement lists four different alternatives for where the marines might be housed.

She added that GWA will have to upgrade its systems in 2013, 2016 and again in 2021 to handle the demands of a bigger population.

GWA general manager John Benavente said the major flaw with the military plan is that they do not address funding for projects off base.

“DOD thinks that development fees will address the costs associated with the growth,” said Benavente. “But GWA does not agree.”

The two companies need to locate a combined $500 million in funding for the necessary projects before the buildup begins.

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