The Guam Power Authority has scrapped its plan to increase its fuel surcharge, which would have resulted in higher power rates for residents next year.
Earlier, GPA general manager John Benavente said that GPA needs to increase its fuel surcharge, or the Levelized Energy Adjustment Clause (LEAC) as it is more formally known, in order to recover some $30 million in costs resulting from the increase in the price of oil.
According to GPA, the price of crude oil has almost doubled and it is now hovering in the $40-plus per barrel level.
If GPA’s original fuel surcharge proposal was adopted, residents would have seen a 14 percent increase to their monthly power bill starting February of next year.
But during last night’s Consolidated Commission on Utilities meeting, Benavente acknowledged the difficult financial situation that many ratepayers are in due to COVID-19.
So instead of passing on its increased fuel costs to the ratepayers in terms of a higher LEAC, GPA decided to cancel the original fuel surcharge increase plan.
Instead, it will seek to recover its fuel costs by putting off the spending of millions of dollars in capital improvement projects and utilizing millions of dollars more from its self-insurance fund to offset the losses from the oil price increase.
The CCU unanimously approved GPA’s new plan and it is now headed to the Public Utilities Commission for final approval.