The U.S. Environmental Protection Agency filed a consent decree in federal court in Washington D.C. last Thursday, setting out strict timelines for the Guam Power Authority to complete construction on a new power plant and close down the old Cabras units which have been in violation of the Clean Air Act.
At a news conference at the utility headquarters in Mangilao on Monday morning, GPA General Manager John Benavente said he expects their partner KEPCO to break ground within the next few months on a new state-of-the-art power plant in Ukudu across from the Micronesia Mall which will burn low-sulfur diesel.
Under the terms of the consent decree, the plant must be completed by October 2022 or GPA will face stiff penalties.
“The KEPCO contract has very strict performance requirements. For the first two months after October 2022, the penalties mirror the US EPA penalties that we have to pay if we don’t meet that date. Then beginning the third month the penalty is $240,000 a day. A day! So you can see how much of an incentive they have,” Benavente said.
There is a 30-day comment period now that the consent decree has been filed. After that, CCU Chairman Joey Duenas said the consent decree will be signed and GPA will have to pay a $400,000 penalty.
“There will be no impact on rates. I can’t stress that enough. The filing with the court is the formal part. After the 30-day period, the judge signs off. Once the judge signs off, then the agreement is binding on the parties. Right now, the agreement is not yet binding. Once the judge signs off, that’s when the agreement is binding. At that point, the agreement calls for us to pay $400,000. We will write that check and pay that,” Duenas said.
GPA was facing fines of up to $600 million. However, the amount of the penalty was cut down to just $400,000 after GPA agreed to build the new power plant and close down the old Cabras units.