Guam Power Authority General Manager John Benavente speaks to members of the Consolidated Commission on Utilities during a special board meeting Wednesday, April 26, 2023, at the Gloria B. Nelson Public Service Building in Mangilao.
HAGÅTÑA (The Guam Daily Post) — The Consolidated Commission on Utilities has approved a reduction in the Levelized Energy Adjustment Clause, and has authorized the Guam Power Authority to petition for the rate reduction with the Public Utilities Commission.
The LEAC is the portion of the energy bill that pays for the fuel used to power the island’s generators. The CCU directly oversees GPA, while the PUC is the rate-setting body for utilities on Guam.
When GPA General Manager John Benavente came to the CCU last week with his recommendation to reduce the LEAC, he had eyed implementation by May 1. But the PUC won’t be able to address the rate change this month because it’s too late to be placed on the agenda for their meeting April 27. Government meetings and their agenda topics must adhere to certain regulations, including advance notice, to comply with the Open Government Law.
The PUC can tackle the rate issue next month, so the LEAC reduction is now eyed to begin June 1. But that’s still a couple of months ahead of when the rate was scheduled to be adjusted, by August.
The delay also comes with a slight increase in the proposed reduction. The initial proposal was to drop the rate down to about 26 cents per kilowatt-hour from the current rate of about 32 cents per kWh.
But Tuesday night, Benavente presented the CCU with an updated recommendation – about 25 cents per kWh. That difference of about 1 cent would save ratepayers using an average of 1,000 kWh per month about $70 on their power bills, as opposed to $61 if the rate were set to 26 cents per kWh, according to GPA reports.
‘Reducing the LEAC rate sooner’
If approved by the PUC, this will be the first reduction in the LEAC since the beginning of the COVID-19 pandemic in 2020. The surcharge began marching upward in February 2021, as fuel prices were rising.
“The semiannual adjustments of the rates have been steadily increasing since mid-2021. However, as the price of world fuel costs decreases this year, GPA proposes adjusting and reducing the LEAC rate sooner. This drop in the LEAC rate was proposed in order to help customers recover from the rise of the LEAC rates within the last two years due to unprecedented increase of world fuel prices,” Benavente stated in a press release on the CCU approval.
“The increase on the overall GPA average residential customer bill was necessary to reduce the under recovery of fuel costs and to prevent further growth in the under recovery balance, and in order for GPA to afford buying fuel oil. While the LEAC rate has changed incrementally, the base rate of about 10 cents (per kWh) has not increased since 2013,” Benavente added.
GPA also noted in the release that lawmakers are attempting to pass another extension to bill subsidies – the Ayuda Para I Taotao-ta energy credit program. First enacted in July 2022, the program provided $500 in credits spread out with $100 monthly disbursements over five months. It was extended five months in December 2022. April marks the final month of the program.
Bill 83-37 proposes another five-month extension, but discussions about the bill have focused on where additional funding could come from, as the measure’s funding source is only enough to cover the first three months or so of the extension.
As GPA pursues the rate reduction, the utility notes that a lower rate would help residents as they stay home to keep cool while the island is in its hotter summer months. The utility encourages ratepayers to reduce their power consumption during peak hours from 6 to 10 p.m.
“Customers could also find energy saving tips for their home on GPA’s Facebook and Instagram pages, and on the website at https://energysense.guampowerauthority.com/savings-tips,” GPA stated in its release.
