PUC approves ‘phased’ power fuel surcharge increase

GPA meter (PNC file photo)

The Public Utilities Commission on Thursday night approved the Guam Power Authority’s petition to increase its power surcharge, also called the Levelized Energy Adjustment Clause.

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According to PUC administrative law judge Frederick Horecky, the PUC approved a three-step LEAC increase:

= A $0.130400/kWh increase on August 1;
= A $0.150800 increase on October 1; and
= A $0.171458 increase on December 1, 2021.

Horecky said the PUC felt that a gradual increase, rather than an immediate increase to the third step, would be more appropriate given the hardships that ratepayers have experienced during the pandemic.

Originally, the Consolidated Commission on Utilities had wanted the current LEAC of 11 cents per kilowatt-hour to increase to 16.7 cents.

That means that the power bill of an average residential monthly power consumption of 1000 kWh would have increased by approximately $57.56 effective August 1, 2021.

According to GPA general manager John Benavente, this increase in the overall GPA average residential customer bill is necessary because worldwide fuel oil prices, which GPA has no control over, have been significantly increasing and have sharply risen recently.

“This increase on the overall GPA average residential customer bill is necessary to reduce the under-recovery of fuel costs incurred during the peak of the pandemic when the LEAC rate was held at $0.0868/kWh for 8 months and for the severe rise in the cost of fuel oil in the global market that followed. GPA has no control over this factor in the LEAC calculation,” Benavente said in a news release.

He added that GPA must recover, to a reasonable extent, the under-recovered fuel costs for the current period and costs carried over from the prior LEAC period.

“GPA, the CCU, and the GPUC recognize that this phased-in approach to the fuel recovery should be done now, which is still manageable in order to avoid a more substantial increase in the future. GPA explored all opportunities to reduce its operating costs and has used $10 million from its self-insurance fund and deferred another $5 million from our capital improvement projects. These amounts help to offset part of the $30 million in projected unrecovered fuel costs,” the GPA general manager said.

According to Benavente, Governor Lou Leon Guerrero has also committed funding assistance for ratepayers in the amount of $15 million from the Coronavirus State Fiscal Recovery Funds.

All combined, Benavente said GPA’s under-recovery could be approximately $7 million at the end of this LEAC period on January 31, 2022.

“This is all to bring relief to our customers as we persevere through this unprecedented and
ongoing pandemic,” Benavente said.