GPA gets green light to enter into $146 million worth of fuel contracts

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The Consolidated Commission on Utilities (CCU) has authorized the Guam Power Authority to enter into two diesel fuel oil contracts with local companies.

The first is with Mobil Oil Guam, Inc. for the supply of Diesel Fuel Oil No.2 for Site Location 1 (Yigo CT and Aggreko), Site Location 3 (Piti 7) and Site Location 4 (Cabras 1&2, MEC 8&9, Manenggon Diesel Plant, and Talofofo Diesel Plant).

According to GPA, the aggregate cost for the two-year contract base period with Mobil Oil Guam is estimated at $113 million.

The second diesel fuel oil contract is with IP&E Holdings, LLC for the supply of Diesel Fuel Oil No.2 for Site Location 2 (Macheche CT and Dededo CT). The total cost for the two-year contract base period with IP&E Holdings, LLC is estimated at $33 million.

While the aggregate contract value for all site locations is estimated at $146 million, GPA general manager John Benavente said the total savings for the two-year contract is estimated at $1.6 million.

Benavente said the estimated savings are derived from the premiums or transportation costs, and insurance expenses.

In addition, GPA also received approval to conduct inspection and refurbishment of GPA’s bulk storage fuel tanks used to supply fuel to the utility’s baseload units.

Upon completion of the inspection and refurbishment of the bulk storage fuel tanks, they will be utilized to store ULSD fuel to supply Piti Power Plant 7 and upon ULSD conversion for MEC Plants 8 and 9 and the proposed 180 MW power plant.

According to GPA, only one qualified bidder submitted a bid for GPA’s consideration and an evaluation committee has determined Tristar Agility to be the responsible and responsive bidder at a cost of $8.9 million.

With the CCU’s approval, all three contracts will now be forwarded to the Public Utilities Commission for review and final approval.

Benavente said the contracts play significant roles with GPA’s plans to reduce costs, prepare for the new efficient power plant and set the stage for more renewables in our near future.

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