Guam Power Plant Plans Open For Public Comment Period

180 MW plant to be build, run by private company could cost $290-400 million

By Gaynor Dumat-ol Daleno

HAGÅTÑA, Guam (Pacific Daily News, Sept. 26, 2016) – Residents next week can weigh in on the Guam Power Authority's plans to have a private company build and operate a large new power plant.

After a series of public hearings, the Public Utilities Commission will determine if GPA’s petition should be granted, granted in part, or denied, the regulatory commission stated.

The future of the island’s now-fragile power supply, and GPA’s mandate to comply with federal standards for cleaner air will also be taken into account, commission documents state.

The cost of GPA’s plan to let a private company produce up to 180 megawatts of power ranges from $290 million to $400 million, said attorney Fred Horecky, legal counsel and public information officer for the commission.

“We have been looking at this a long time,” Horecky said of GPA’s proposal.

When GPA first submitted its plan for a new power plant in 2014, the island still had a surplus of generating capacity.

A year after GPA’s power plant plan was submitted, the Aug. 31, 2015 explosion and fire at the Cabras 3 and Cabras 4 power plants, which produced 79 megawatts, wiped out GPA’s comfortable supply margin. GPA now relies heavily on the two older Cabras plants, even though they’ve had recurring failures.

Residents have experienced blackouts in recent weeks because of mechanical problems with one or more of the remaining power plants.

GPA intends to retire the Cabras 1 and 2 plants after the new power plant is completed. The new plant would be fueled initially by ultra-low-sulfur diesel, and later liquefied natural gas, if the cost of bringing natural gas to Guam becomes feasible.

With GPA’s new reality, Horecky said, “it may well be that we do need this new generation to replace some of the old plants.”

If the PUC approves a new power plant, the commission alsowill need to review how much of the new power generation should be powered with fossil fuel, how much the plan would cost ratepayers, and what other steps GPA would take to integrate renewable energy sources, such as solar, Horecky said.

“The cost impact of GPA’s plans for 180 megawatts of new generation has not been fully explained at this point,” according to the PUC.

In its updated plan, submitted to PUC in July, the power agency states that its new generation plan could result in rate increases on the total bill of 1.8 percent in 2024, 1.7 percent in 2025,and 4.6 percent in 2026.

GPA is proposing what’s called an “independent power producer” model. Under that concept, a private investor or group of investors would pay to build the plant and have the plant privately run, Horecky said.

GPA would buy the private power plant’s supply, similar to the agency’s arrangement with the island’s first utility scale solar power plant, which was built by U.S. renewable company NRG Solar,  and is privately run.

GPA has a history of poorly maintained power plants, as shown in a previous study, Horecky said.

GPA also plans to incorporate up to 120 megawatts of renewable energy into the islandwide power system with battery storage and energy storage systems, according to the commission.

NRG Solar’s Guam plant can produce up to 25 megawatts, or about 10 percent of the island's peak demand, but without battery storage to keep providing power at night, the plant is unable to help provide GPA with supply during peak usage hours, which span from 6 to 10 p.m.

GPA has not yet decided whether to restore Cabras Units 3 and 4 as part of its power plan, the PUC stated.

Pacific Daily News
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