Sanchez says bond sale delays cost ratepayers

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CCU Commissioner Simon Sanchez (PNC file photo)

In a recent NewsTalk K57 interview, CCU Commissioner Simon Sanchez discussed how the passing legislation for a bond sale would have saved ratepayers millions of dollars.

PNC’s Michael Knight has the story…

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Many of us have recently opened up our power bills to find a significant increase staring us back in the face. The recent spike in oil prices has driven up the cost of fuel, which in turn, forces the C-C-U to adjust the rates for power upward to avoid significant shortfalls. That leaves ratepayers feeling the crunch.

Along with short-term price and investment position adjustments in the local market, one of the C-C-U’s tasks is to address long-term financing options periodically, and seek solutions to save money for ratepayers over the long haul. Many times this is accomplished through a bond sale.

Bond sales allow the utility companies to raise money, functioning as a loan between an investor and the utility. The investor agrees to give the utility a certain amount of money for a specific period of time. In exchange for periodic interest payments.

When the bond reaches its maturity date, the company repays the investor. The money can then be used at the utilities’ discretion for research and development, infrastructure, and even to refinance old loans at better rates, potentially saving ratepayers millions of dollars.

C-C-U commissioner Simon Sanchez was on NewsTalk K57 this morning with Patti Arroyo, and said a new bond sale just took place yesterday, saving ratepayers several million dollars.

While the savings were significant, Sanchez went on to say that quicker action by legislators last year could have saved ratepayers even more.

Sanchez adds that he’s perplexed by the delay, as GovGuam had already been refinancing other agencies’ debts.