The Public Utilities Commission has approved the LEAC increase. This means that a customer who consumes 1,000 kilowatts a month will pay an additional $36.88, said GPA spokesman Art Perez.
Perez used the 1,000 kilowatts as a base average for consumers who use that amount of power. Consumers who consume 1,000 kilowatts are paying $199.02, and with the increase, their total billing will be $235.90.
In December, GPA recommended to the PUC a 17 percent increase, but because of the rise in oil since December, PUC consultants Georgetown recommended the 18.53 percent, said Perez.
“When we filed in December, it was a much lower rate. The adjustment reflects the increase. The rates have gone up, not just for Guam, but worldwide. It’s a reflection on the impact on the price of fuel. We are not immune to that,” said Perez.
Perez said he wanted to remind power consumers that GPA does not make any money on the LEAC surcharge which comprises two-thirds of a customer’s bill. This is just used to purchase fuel.
Ratepayers will see another increase on April 1, 2012, with another surcharge that will tacked on to their power bill — the Working Capital Fund surcharge, which was delayed for one year.
“We decided last year to delay the Working Capital Fund surcharge for one year. It would have gone into effect April 1, 2011. If we didn’t do that, ratepayers would have been hit with two rate increases within a 30-day span,” said Perez.
With the unexpected $5.1 million windfall to GPA from the Bank of America settlement, GPA general manager Joaquin Flores recently appealed to the CCU to apply the $5.1 million to the Working Capital Surcharge.
“Given my position on the Working Capital Surcharge, the application of the $5.1 million is better suited to offset any LEAC increase that this commission determines is warranted for the period February 2011 through July 2011,” said Senator Ben Pangelinan.
At the PUC meeting, Pangelinan gave testimony on various issues, but also asked the PUC that residential civilian rate payers be removed from the Working Capital surcharge.
The Revenue Bonds 2010 Series A included Series 2010A Subordinate Lien Taxable Bonds to fill a Working Capital Fund and to retire $20 million in Cathay Commercial Paper.
According to the Guam Consolidated Commission on Utilities Resolution No. 2010-27, the Working Capital Fund is a contingency fund intended to ensure “funds would be available to respond to the next natural disaster.”
Pangelinan testified that while this was a legitimate concern, he questioned the filling of a contingency fund with bond proceeds and leveraging the need to fill the Working Capital Fund within the newest revenue bond indenture and passing the cost to civilian residential ratepayers.
The Working Capital Surcharge allocation of debt service for civilian residential rate payers is estimated to cost approximately $2.5 million dollars a year over four years or an average increase of about $22 dollars a year per household, said Pangelinan.
