By Gerardo R. Partido
Variety News Staff

THE Guam Power Authority wants to raise its base power rate by 19.7 percent to cover its increased operational and maintenance costs.
This is different from the fuel surcharge that GPA adjusts every six months to cover its fuel costs.
According to GPA, it hasn’t had a base power rate adjustment in a decade as its last rate petition was filed in 1997.
If GPA’s plan is approved, residential customers can expect to see a 1.29 cent increase per kilowatt hour. Commercial customers like hotels can expect to see a 1.75 cent hike per kilowatt hour.
Overall, the average residential bill would go up by 7.6 percent, while commercial bills would go up by 8.9 percent and government of Guam power bills would rise by 9.5 percent.
The base power rate hike petition, which GPA submitted to the Public Utilities Commission last night, also doubled GPA’s insurance surcharge and increased the cap to $25 million.
Moreover, a $5 per transaction credit card surcharge will be billed to the utility’s residential customers if the petition is approved.
All in all, GPA hopes to raise about $26.9 million annually from its base rate hike petition.
GPA plans to implement the new power base rate by February next year if PUC gives its approval. GPA officials will also be conducting “roadshows” in the various island villages to inform and educate residents about the petition.
In a press conference yesterday, GPA general manager Joaquin Flores defended the utility’s plan by saying that although energy production from GPA’s baseload plants has grown by 98 percent resulting in substantial savings for ratepayers, GPA’s base rate revenues have remained flat.
Because the utility’s base power rate has remained constant for almost a decade, Flores said GPA has not been able to fund important infrastructure and maintenance projects.
Capital projects deferred include maintenance on two combustion turbines, transformer upgrades, and other much needed repair work.
Flores also pointed out that GPA has not been able to maintain its ideal workforce size due to funding constraints. The utility’s personnel budget provided for 589 employees prior to the creation of the Consolidated Commission on Utilities. GPA’s current staffing level is just 531.
GPA has also had to cut down on power substation maintenance services, computer upgrades and research activities.
If GPA is not granted a base rate increase, Flores said the number and frequency of outages could increase as the utility’s generators and other equipment break down from lack of proper maintenance.
Safety could be compromised, environmental risks increase and GPA’s insurance, which the utility’s bond holders require, could be cancelled.
Although GPA only recently got a positive review from international bond rating agency Standard & Poor’s, Flores warned that disapproval of its base rate petition could lead to a downgraded credit rating that would limit GPA’s access to financial markets.
Flores also warned that the Navy, which is one of GPA’s biggest customers, may decide to “delink” from GPA if it thinks that GPA’s product and service would deteriorate as a result of disapproval of the base rate hike petition.