Guam Power Authority: No More Hikes Till February 2014

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Customers assured increases due to coping with rising costs

By Michelle Conerly

HAGÅTÑA, Guam (Pacific Daily News, Oct. 2, 2013) – The cost of power increased yesterday, but the Guam Power Authority (GPA) anticipates no other increases or changes until next February, when fuel-cost adjustments are considered.

Power bills yesterday increased by about 1.9 percent for the average residential customer because of money borrowed by the power agency.

That's an increase of $8 to $9 on the total bill for customers who use 1,000 kilowatt-hours a month.

The rate increase, dubbed the "final phase of (the) multiyear rate plan" by Guam Power Authority General Manager Joaquin Flores, was driven by debt-service requirements associated with the agency's 2010 bond issuance, Flores said.

He assured ratepayers that the increase wasn't due to lost revenue, but instead the trend "is one that every utility in the United States, whether public or private, faces as the industry changes with rising costs."

"GPA has taken extraordinary steps to mitigate the impact of the proposed increase by utilizing short-term financing to spread these costs over a number of years," Flores said.

Flores said that the most recent increase will help enable GPA to meet the island's power needs while the agency continues to seek other ways to minimize rates over the long term.

"The authority believes it is operating at the most efficient level possible, given the revenue stream available," Flores said.

Surcharge

Ratepayers might get some price relief in the near future, however, if the power agency decides to eliminate the working capital fund surcharge from monthly power bills.

The surcharge helps the power agency build a rainy day fund for emergencies.

Art Perez, Guam Power Authority spokesman, said the surcharge, which is a fraction of residents' power bills, is necessary so GPA can continue to provide service to residents, even if the utility is unable to collect revenue.

But since there hasn't been a large disaster -- such as a typhoon -- in about a decade, Perez said, the working capital fund is close to being fully funded, which means it could be taken off resident's power bills.

The fund amounts to about a month's worth of operations, or one-twelfth of power agency's annual fuel shipment and operating expenses.

Perez yesterday was unable to provide details about how much money is needed to fully fund the working capital fund or exactly when he expects it to reach that cap.

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