Power rates may go up next year

Guam Power Authority (PNC file photo)

Some bad news for ratepayers, your power bill could go up once a proposal for an increase in the Levelized Energy Adjustment Clause, or LEAC, gets the final thumbs up.

The LEAC is a fuel surcharge collected by GPA from its customers depending on the international price of oil. It is adjusted every six months to reflect changes in the utility’s fuel costs.

Should the recent LEAC proposal get the CCU’s endorsement and then the PUC’s final approval, the rate increase will take effect next year on Feb 1.

CCU commissioner Simon Sanchez says if adjustments are not made to the LEAC, the Guam Power Authority will have a shortfall of $30 million dollars a year from now, which could hamper GPA’s ability to buy oil for power generation.

And how will the latest LEAC adjustment impact the ordinary ratepayer? Sanchez told K57’s Patti Arroyo that we may see a 14 percent increase to the monthly power bill starting next year.

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“Your total power bill, just to keep it simple, for most people it would go up by about 14 percent, about $25 to $28, if you have a $200 a month power bill which is the average power bill for your average ratepayer,” Sanchez said.

The reason for the rate adjustment is the increase in oil prices in the global market, according to Sanchez.

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“Right now, oil has crept back up. Now, we are back at an equilibrium,” Sanchez said.

Sanchez says another way to buffer the impact of the LEAC adjustment would be to delay the power authority’s CIPs. He says the power authority spends 14 to 20 million dollars annually to fund these capital improvement projects.