By Gerardo R. Partido
Variety News Staff

THE new fuel contract currently being negotiated by the Guam Power Authority won’t add to its power costs, GPA assured yesterday.
GPA is currently negotiating with British Petroleum and Vitol Asia for a $180 million contract to supply fuel for the utility.
The contract is for three years but has an option for two one-year extensions.
Earlier, there were fears that because there were few companies in the bidding for the contract, GPA might not get the best deal possible.
But according to GPA public information officer Art Perez, the utility put detailed specifications in the bid to ensure that GPA would get the best deal and this may be one reason why not more companies were attracted to the bidding.
“We’re looking for ways to get oil as cheaply as we could. The specifications we included in the bid would ensure that we could get the cheapest source of fuel. This would be to the ratepayers’ advantage,” Perez said.
In addition, Perez said GPA tightened and narrowed the specifications to ensure that GPA would get the right kind of fuel for its generators—fuel that is less likely to be affected by sludge and does not need too much maintenance.
“We’re also constantly improving efficiencies to counteract our increased fuel costs. Our generators, for instance, are near 100 percent efficient. This means we’re not wasting valuable fuel on less efficient generators,” Perez said.
Andy Balajadia, assistant general manager for GPA operations, said the contract for GPA’s new fuel supplier is expected to be awarded soon so that GPA can have an assured supply of fuel.
He said the new contract is also not expected to affect the 11 percent increase in the Levelized Energy Adjustment Clause, or LEAC, that GPA is asking from the Public Utilities Commission at least for this current LEAC period.
The LEAC is a fuel surcharge tacked on power bills by GPA at six-month intervals. According to Perez, the current LEAC petition already takes into account GPA’s projected fuel expenses for the next six months.
In May last year, GPA decided to re-bid its annual fuel contract to see if it can get better deals for its fuel purchases.
The Consolidated Commission on Utilities gave its approval for GPA not to extend its fuel contract with British Petroleum.
“Rather than extend the option for another year, we decided to go out and re-bid the contract to find out if we can realize savings,” CCU’s Simon Sanchez said.
Currently, GPA is already spending almost $180 million a year for fuel and this is expected to climb even higher because of the spiraling price of oil.
“Fuel cost makes up 60 percent of the power bill. So everything we can do to minimize or reduce the rate of increase will help ratepayers,” Sanchez said.
British Petroleum has been GPA’s primary fuel supplier for four years now.
GPA’s contract with BP still had a one-year renewal option but the agency decided to waive the option and entertain other offers.