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By David V. Crisostomo

HAGATNA, Guam (Pacific Daily News, May 19) – The Guam Power Authority expects to soon benefit from a new five-year contract with a local company that will recycle thousands of gallons of the agency's waste fuel oil into fuel that can be reused at the island's baseload generators.

The waste oil will be recycled for free by local company Pacific Environmental Resources Inc./Pacific Refining Inc. and then sold back to the power agency as bunker fuel oil. The cost of the recycled fuel -- approximately $1.8 million a year for 48,000 barrels -- is cheaper than what it would cost the agency to buy similar fuel off island, according to the power agency.

The agency expects to save at least $273,000 a year under the contract with PERI, said GPA General Manager John Benavente.

"We have never been able to recycle waste fuel oil before because the island has never had a refinery to do this," Benavente said.

For the past 15 years, Benavente said used waste oil had been mixed and burned at the baseload generators, but that use came with considerable cost of maintenance to the generators. The cheaper, recycled fuel will not involve added maintenance costs, meaning money that would have been spent on imported oil will remain on island.

"As stewards of our island, this partnership provides our island community an alternative means for cost-effective waste oil management, but also another business opportunity that continues to support our island economy," Benavente said.

PERI Vice President and General Manager David C. Taitano Jr. said the public-private partnership with the power agency is a "win-win" situation for both parties, and most especially for ratepayers.

The recycled fuel will be sold to the agency at a set rate and will not be susceptible to fluctuations in fuel prices in Singapore, where Guam gets its fuel, Taitano said.

Taitano said his company has been specializing in used oil recycling since the company opened in 1993. The idea for refining waste fuel oil on Guam has been the brainchild of PERI President James Stone, Taitano said.

Taitano said the company is excited that its current operations can now handle the volume needed to supply the power agency with reprocessed fuel. Taitano said he hopes his company can further develop the ability to reprocess 100 percent of waste fuel oil on Guam and supply the power agency with more recycled fuel.

May 19, 2005

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