Port Authority billed $12 million

FRIDAY, 01 APRIL 2011 01:56 BY JANELA BUHAIN | VARIETY NEWS STAFF

THE Port Authority of Guam on Wednesday received an unexpected bill from the Department of Administration for $12.25 million

The Port Authority of Guam on Wednesday received an unexpected bill from the Department of Administration for $12.25 million for an “autonomous agency infrastructure collections fund” as authorized by a public law dating back to 1997. Variety file photo

for an “autonomous agency infrastructure collections fund” as authorized by a public law dating back to 1997.

The amount of the bill is an annual assessment of $875,000 since 1998 that the Port has not paid, according to the bill that DOA sent to the Port Authority.

Received

“We did receive an invoice for $12.2 million from the Department of Administration. We are currently reviewing the invoice. We will reserve comment until we have further explored this matter,” said Pedro Leon Guerrero, Jr., PAG general manager.

Leon Guerrero said he is anticipating meeting with the Department of Administration to further discuss the assessment of $12.2 million.

Public Law 24-14 states that the four autonomous agencies—The Guam International Airport Authority, the Guam Power Authority, The Port Authority of Guam and the Guam Telephone Authority—are assessed an aggregate amount of $3.5 million annually, or $875,000 per autonomous agency.

GTA is no longer an autonomous government agency as it was officially privatized in 2002.

The aggregate amount, the budget law states, is “in lieu of taxes and other charges as may normally be assessed against a private company for utility easements, gross receipts taxes, taxes on audited income, government development fees, such as water wells and monetary fees.”

But Committee on Utilities Chairperson Tom Ada is concerned that by paying the amount, the Port will face hardships that will get passed onto Guam’s consumer.

Tariff hike

“If Department of Administration is going to go and assess $12 million out of the coffers of the Port Authority, which I’m certain is money programmed for other port-related work, if they take that away from them, the Port is going to need to make up for that loss most likely through an increase in tariffs,” said Ada on Wednesday.

This likely increase in tariffs, Ada said, would ultimately get passed down to Guam’s consumers.

“Now the cost of food commodities on the shelves are going to have to be increased to cover the additional increase in shipping costs,” he said.

The entire fund was supposed to be used “solely for the purposes relating to the health and public safety of the people of Guam and public works,” the law states.

At the time, according to the law, “senseless violence” associated with illegal drugs was adversely impacting the public safety and quality of life of island residents.

The funds are supposed to go towards the training and salaries for police and corrections officers.

But even former Gov. Carl Gutierrez at the time, in his transmittal letter to the late Speaker Antonio Unpingco, said this assessment on PAG would “severely constrict the lifeblood of our island’s economic activity, the shipment of goods.”

Consumers brace for higher bills, price hike

Consumers brace for higher bills, price hike

Monday, 01 February 2010 03:34
by Tiffany Sukola | Variety News Staff

STARTING next month, ratepayers will see their monthly bill increase by nearly 12 percent as Guam Power Authority will raise the fuel recovery charge from 12.96 cents to 15 cents per kilowatt hour.

The Public Utilities Commission last week approved GPA’s petition to increase the fuel recovery charge, also known as levelized energy adjustment clause.

This fee helps pay for the fuel used to run GPA’s generators.

According to the figures given at the meeting, residential customers who use an average 1,500 kilowatt hours per month can expect to pay about $30 more.

Although GPA had requested the fuel recovery charge be increased to 14.21 cents per kilowatt hour, the commission decided to increase that charge to 15 cents per kilowatt hour based on a study done by the power company’s consultants, Georgetown Consulting Group.

The commission also gave the Guam Waterworks Authority the green light to begin implementing a system development charge for first time users hooking up to the company’s water and sewer lines.

GWA officials have said that the fee, effective March 1, is necessary in order to recover costs associated with expanding, repairing and upgrading the current system in order to handle an influx of new users.

Water connection fee

The waterworks company’s proposed price tag for the new development charges start at $3,280 for a 5/8-inch water meter, the typical size for a residential waterline, according to GWA’s website. A 5/8-inch wastewater line would cost approximately $4,780 to connect.

Water and waste waterlines typically used by condominiums and other large commercial buildings could cost upwards of $700,000 to connect.

Since the PUC approved the development charges, the cost of building a brand new, average-size home will increase by nearly $5,000.

During the meeting, commissioners brought up concerns about the fees, saying the steep price might make owning a home nearly impossible for some island residents.

GWA officials said they will work on drafting a policy for a payment plan that would allow all residents, not just low-income residents, to pay the connection fee in installments.

Tariff hike

While utility bills are set to increase, consumers will also have to deal with increases in prices of goods that are shipped to Guam.

The Public Utilities Commission last Friday approved the Port Authority of Guam’s request to implement interim tariff increases to help recover operating costs and fund portions of the modernization plan.

The PUC approved the interim increases for cargo handling, fuel throughput and bunkering fees. They also conditionally approved a new $25 bill of Lading Fee. However, the request to bring the Agana Marina Fees up to the same level as the Agat Marina Fees was denied and the PUC recommended the work that the Port needs to accomplish in order to bring that request before the PUC again for consideration.

“This is a huge boost to our port modernization efforts and will help strengthen the finances of the port considering this will be the first increase in 17 years,” said port general manager Glenn A. Leon Guerrero. “These interim tariff increases are yet another milestone in our efforts to modernize and upgrade our island’s only commercial sea port. We are working aggressively to prepare our port for the future and to create a world-class facility that will service our island and our region for the years to come.”