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    Monday, June 18, 2018-3:53:36P.M.

     

     

     

     

     

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Guam power rate to increase

HAGÅTÑA (The Guam Daily Post) —  The Guam Power Authority is looking at increasing the fuel surcharge between 7 percent and 19 percent to fully recoup the cost of fuel, depending on its price point in August.

In terms of the customer’s total monthly bill, the surcharge increases reflect either a 4 percent or 12 percent increase, respectively, for customers consuming 1,000 kilowatt-hours on average.

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The Guam Power Authority Cabras Power Plant in Piti is pictured in April 2017.  The Guam Daily Post file photo

The fuel surcharge, or levelized energy adjustment clause, is normally adjusted every six months to meet the tide of energy costs. The surcharge rises or falls with the price of fuel — it is intended to be revenue neutral for GPA.

However, costs have only been rising the past few adjustment periods.

The Public Utilities Commission, which has overview of all rate matters, approved a twofold surcharge increase in February. The second part took effect in May, increasing the surcharge to 15.4 cents per kilowatt-hour.

GPA management presented its latest projections to the Consolidated Commission on Utilities last week. The next surcharge will take effect in August and GPA is looking at between 16.5 cents and 18.5 cents per kilowatt-hour to fully neutralize losses from fuel purchases.

That surcharge range is assuming that the cost of residual fuel oil is between $74 and $85 per barrel by August. GPA is projecting to lose between $7 million and $20 million if the surcharge remains at 15.4 cents per kilowatt-hour, depending on the cost of fuel.

GPA is expected to provide a more solid recommendation on the next surcharge in June. In addition to CCU approval, the surcharge must be approved by the PUC.

Guam mainly uses two energy sources for its current power needs. One is residual fuel oil, having high sulfur content, used in GPA’s main generators. The other is ultra-low-sulfur fuel, used in peak-load generators.

As of March, the average price per barrel of residual fuel oil was about $72. A barrel of ultra-low-sulfur fuel is about $6 more.

But GPA will be phasing out generators that use residual fuel oil in favor of a new power plant that uses the more expensive ultra-low-sulfur variant.

This is to meet federal emissions regulations as well as power demand on island.

A bill promising to rezone a piece of property near the Harmon substation lapsed into law last week. According to Post files, GPA intends to purchase the land for $10 million using insurance proceeds from the downed Cabras 3 and 4 power plants, which were destroyed in an explosion and fire in August 2015.