GUAM BILL WOULD PROMOTE PRIVATE ALTERNATE ENERGY

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By Mar-Vic Cagurangan

SAIPAN, CNMI (Marianas Variety, Dec. 11) – Peter Sgro Jr., president of International Group Inc., is seeking to drum up the business community’s support for a bill that proposes to open up the power market to the private sector and promote the development of alternate energy technology on Guam.

Sgro said there is a pressing need for the Legislature to quickly act on Bill 122 considering the global factors that affect fuel prices, as well as the long and complicated process involved in power plant development.

"We believe time is of the essence for a number of reasons not only because of the military buildup but credible studies reflect oil prices will reach US$115 to US$130 a barrel especially considering that OPEC members are following the lead of Iran and Venezuela in calling for de-linking from the U.S. dollar to the Euro in valuating oil prices," Sgro stated in a letter to the Guam Chamber of Commerce.

Sgro and his partner Frank Arriola are leading a group of investors from Tokyo and Manila who are interested in developing alternative power generation at no cost to the government of Guam.

"As a Chamber member and because of the significance of this bill on the business community and its consistency with Chamber positions on private sector investment, we ask that the executive committee discuss this bill," Sgro said.

Introduced by Sen. Jesse Lujan, R-Tamuning, Bill 122 seeks to authorize the sale of energy by independent power producers directly to consumers, provided that the power rate is at least 10 percent less than Guam Power Authority’s current rate.

The bill, titled the "Power Bill Reduction and Stabilization Act of 2007," would also require Guam Power Authority to lease its transmission lines to commercial power producers, and accept unsolicited offers from companies that produce power from alternate energy sources such as wind and sun.

[PIR editor’s note: In Hawaii, a law passed last year calls for one-fifth of the state's energy to come from renewable sources by 2020.]

Sgro said the bill’s provision that allows Guam Power Authority to negotiate on an unsolicited offer is similar to an existing rule that governs procurement for the Guam Waterworks Authority.

If passed into law, Bill 122 "can set the stage for private companies to initiate the procurement process rather than an agency," Sgro said.

Guam Power Authority and the Consolidated Commission on Utilities rejected Bill 122 during an initial public hearing two months ago. Power officials said the bill would jeopardize Guam Power Authority’s bond covenants.

Lujan’s committee will set another public hearing schedule for the substitute version of his Bill 122, which is cosponsored by Sen. Rory Respicio, D-Agana Heights. Respicio is the author of a similar measure, Bill 115.

Sgro said the immediate passage of the bill is imperative in light of the military’s plan to stop acquiring power services from Guam Power Authority.

"If the military de-links from Guam Power Authority as a customer, this would result in an immediate power base rate increase of 15 percent to be shouldered by the business community and residential community," Sgro said.

Sgro dismissed Guam Power Authority’s claim "there is a lot of time and that there is significant capacity."

"We have consistently responded that we agree there is currently sufficient capacity but it is very expensive capacity," Sgro said.

"Guam Power Authority continues to counter this bill with an Integrated Resource Plan which is now slated for its draft to be completed by the summer of 2008. We are not sure why they are starting again since we maintain a draft Integrated Resource Plan by the same consultant in 2006," he added.

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