Power bills may rise as GPA seeks to recover fuel costs

GPA general manager John Benavente. (PNC file photo)

Because of the increase in fuel prices and shipping costs, residents might get a higher fuel bill if a proposal to increase Guam Power Authority’s fuel surcharge is approved.

During the recent meeting of the Consolidated Commission on Utilities, 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.

The LEAC enables fuel costs to be set on a bi-annual basis and the next LEAC adjustment, whether up or down, is scheduled for this August. The LEAC allows sharp market price fluctuations to be spread over a six-month period and provides increased consistency to customer bills.

Every six months, a schedule of fuel costs is provided to the Public Utilities Commission to enable the LEAC rate to be reset. Any under recovery or over-recovery is “trued up” during the review process. In the event that GPA’s fuel forecasts indicate an under-recovery exceeding $2 million, it is allowed to petition for an adjustment before the expiration of the LEAC period.

According to Benavente, if the current LEAC rate of 8.6 cents per kilowatt hour is maintained, GPA will be facing a deficit or under-recovery of $16.9 million by January 2021. To address the deficit, the LEAC would have to be raised to 11.45 cents.

Loading the player...

“To have this go back to zero we have to go to an 11.5 percent LEAC rate which is what we had back in April of this year,” Benavente said.

“This is still cheaper than it was in 2019 or 2019,” CCU Commissioner Simon Sanchez said.

Any fuel surcharge increase will still have to be approved by the Public Utilities Commission.