GUAM BUSINESSES STRUGGLE UNDER MOUNTING COSTS

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Pending power rate increase to add to misery

HAGATNA, Guam (Pacific Daily News, July 31, 2008) – With power rates set for another increase in coming months, island businesses are feeling the pinch.

The Guam Power Authority petitioned the Public Utilities Commission for a Levelized Energy Adjustment Clause increase of 2.19 cents per kilowatt-hour. This would increase the charge from 17.04 cents per kilowatt-hour to 19.23 cents per kilowatt-hour.

According to Consolidated Commission on Utilities Chairman Simon Sanchez, residents can expect around $20 added to an average 1,000 kilowatt-hour consumption rate.

James Howard, T.G.I. Friday's general manager, said he noticed a significant drop in the number of local patrons. He cited rising costs as the reason behind the number of local customers decreasing. He said the cost of food -- also tied to oil-related costs -- is higher, causing service industry closures nationwide.

High fuel costs aren't a problem specific to Guam. They have hurt retail environments nationwide.

"What our profit margins were a year ago have been chipping away," Howard said. "This affects everybody."

He said while a popular restaurant used to be the place to go with family and friends on a Friday night, the practice lately has been relegated solely to special events, such as graduations.

"I talk to the guests often," he said. "It's always the topic of conversation."

Guam Power Authority officials hope for the increase to be implemented in October, but will also ask the Public Utilities Commission to consider tending to the request earlier, in hopes of avoiding losing even more money because of rising fuel costs.

Sanchez said once the adjustment is approved, customers will be paying more than 75 percent of their power bills to fuel recovery charges.

Howard said his restaurant is implementing measures to reduce utility consumption, such as installing energy-efficient air conditioners and a self-regulating oven exhaust hood and tracking utility high and low points.

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