As gas prices plunge, GPA mulls another cut in fuel surcharge

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GPA general manager John Benavente said the fuel surcharge, also known as Levelized Energy Adjustment Rate, may have to be increased next month in order to recover GPA's cost of fuel. (PNC file photo)

In what could be the only positive side effect of the COVID-19 pandemic, the cost of crude oil has dropped dramatically, thus lowering the price of gas at pumps across Guam.

And we’ll find out this week if cheaper gas, could also mean a drop in your monthly power bill.

After a fuel surcharge price drop in February, Guam Power Authority General Manager John Benavente says they’re crunching the numbers to see if they can offer a further reduction.

He says GPA purchases fuel once a month so any impact from dropping global prices won’t be felt until April.

“We’re waiting and seeing over the next week or so as to where the projected fuel costs may be because it can go up and down today. But really, the projection of whether it’s going to be $30 dollars a barrel or $40 a barrel for at least the next several months,” Benavente said.

Benavente couldn’t comment on how much of a price drop Guam could see if GPA were to recommend a reduction in the fuel surcharge.

He says there are several factors that determine if the utility can drop the price, including delaying work on one of the old Cabras units.

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“We’ve all decided that we’ll postpone it [the overhaul] until the end of this year. So that makes a positive impact, that we will consume less fuel because the unit that we would have been overhauling is our second most efficient system in the unit,” Benavente said.

He added that they’re delaying the work over COVID-19 concerns since some of the staff are from Taiwan.

GPA will make a recommendation to the CCU Thursday on the cost of the fuel surcharge.

The LEAC period goes until the end of July so any potential price adjustment would be in effect until then.

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