HAGÅTÑA (The Guam Daily Post) — The Guam Power Authority is hoping to extend the performance management contract for the Cabras power plant, a matter critical to extending the operation of the aged facility, which is of particular importance due to expected delays in the commissioning of Guam’s new Ukudu power plant.
The Cabras 1 and 2 generation units in Piti are two of the island’s oldest, more than four decades old, and were scheduled for decommissioning by the end of October 2024, after the new Ukudu power plant was to come online in April of that year.
However, Typhoon Mawar damaged storage tanks at Ukudu and the project’s completion may be delayed up to a year, according to earlier statements from John Benavente, GPA general manager.
A definitive timeline hasn’t been released, but a recovery plan is being developed, according to a resolution extending the PMC for Cabras 1 and 2. For now, the old power plant remains necessary to meet daily energy demands on the island and extending the contract is critical to ensuring its operation through October 2025, the resolution added.
Taiwan Electrical & Mechanical Services Inc., or TEMES, was awarded the performance management contract, which began in October 2020. The contract had a base term of three years, with an option to extend for two additional one-year terms.
But in April of this year, TEMES informed GPA it planned to terminate the PMC at the end of the base term, on Sept. 30. Reasons for the decision included increased labor wages, additional work – and work hours – to support the aged power plant, augmenting a reduction in skilled GPA personnel, concerns with performance metrics, and limited life-extension projects as the Cabras plant is due for retirement.
By late May, Typhoon Mawar had struck Guam and damaged the Ukudu power plant.
GPA has met with TEMES and negotiated several term considerations. These include a fixed management fee of more than $2.6 million for the first extension year and a fee of more than $2.7 million for the second extension year. Term considerations also include reimbursable operation and maintenance expenses of $1.35 million for each extension year. PMC staffing is also to increase from six to eight personnel to support additional work and work hours.
The Consolidated Commission on Utilities, GPA’s governing board, authorized the power utility to petition the Public Utilities Commission for approval of the PMC extension during a special meeting Monday.
Both the commissioning of the Ukudu facility and the decommissioning of Cabras 1 and 2 are part of the consent decree GPA entered into with the U.S. Environmental Protection Agency. The power utility had been noncompliant with federal emissions regulations for years and entered into the consent decree to avoid hundreds of millions of dollars in fines.
At the end of May, when GPA briefly discussed the delay to the Ukudu power plant with the CCU, The Guam Daily Post asked the utility if it knew how the delay would impact the consent decree.
GPA responded in early June that the U.S. EPA had been informed of the damage from the storm, which would be addressed once power service had been restored to the island.
Guam Power Authority’s Cabras plant in Piti is shown April 12, 2023. GPA is hoping to extend the performance management contract for the facility.
