Thursday, April 22, 2010

CCU Proposes Loan

CCU proposes $210M loan
GPA plan includes upgrading facilities, equipment
By Dionesis Tamondong • Pacific Daily News
April 22, 2010

Power generation and distribution projects, a central office for Guam's power and water agencies, and investments into digital technology are among the things for which the Guam Power Authority plans to borrow about $210 million.

The Consolidated Commission on Utilities on Tuesday approved the power agency's plan to borrow up to $210 million for various improvement projects and refinancing efforts.

The bond financing needs the approval of the Legislature and the Public Utilities Commission. The loan would be paid back with future revenues collected from ratepayers.

The agency also has plans for another series of rate increases starting April 2011, according to a resolution the utilities commission passed Tuesday night.

CCU Chairman Simon Sanchez said a bulk of the borrowed money would go toward upgrading the agency's transmission and distribution facilities and equipment. If those facilities are able to run more efficiently, it will help lower the agency's operating costs, and in turn, delay or reduce future rate increases, Sanchez said.

The agency plans to invest in a $33.2 million Smart Grid Project, which has been estimated to produce up to $5 million per year in fuel savings, according to the CCU resolution. The agency received a $16 million federal grant for the digital technology project, but it must come up with the rest of the money.

A shared, central facility is also planned for the two utility agencies, which would called the Fadian Administration and Operations Center.

The building would help reduce costs for leasing and renovating existing facilities while streamlining operations for the two agencies, the resolution stated.

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