GPA Proposes Settlement Funds Be Used to Offset Surcharge Increase

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Guam – During a regular meeting of the Consolidated Commission on Utilities Tuesday evening, GPA proposed that the Bank of America (BoA) settlement funds be used to offset the impact of the Working Capital (W/C) Surcharge effective April 1st , 2011.

GPA will officially file the petition with the Public Utilities Commission (PUC) January 2011.

“The W/C Surcharge was deferred from last year as a result of the Authority’s successful bond sale this past June,” stated Randall V. Wiegand, CPA, Chief Financial Officer, “With the approval of the CCU to apply the settlement funds to the surcharge in April, customers will not be affected by an additional 2% increase on their monthly power bills – the surcharge will now be effective 1 April 2012.”

The settlement funds amount to $5.1M dollars and are derived from an agreement between BoA and the Security & Exchange Commission (SEC).

Commissioners Tuesday evening also approved the Authority’s request to petition the PUC for a 17.27% increase in the Levelized Energy Adjustment Clause (LEAC) to be effective 1 February 2011.

“The significant rise of fuel costs to GPA over the past several months amounted to about $7M in under recovered expenses,” stated Randall V. Wiegand, CPA, Chief Financial Officer, “This would equate to an approximate increase of 17% to an overall residential power bill averaging 1000 kW per month or about an additional $34.36 every month – coincidentally, this adjustment brings the fuel recovery charge rate back to where it was last year in February, 2009 where fuel oil price were about the same.”

The decision to apply the BoA settlement funds to the W/C Surcharge was to not affect customers with a second increase during a short period. During this upcoming LEAC period, GPA will also closely monitor the fuel oil market for any opportunities to pass on savings to customers