Guam's average power bill could drop by $53.19 a month as GPA seeks rate reduction
The average customer may see their monthly power bill drop by around $53.19 come Feb. 1 if the Guam Power Authority gets the power bill adjustment it wants.
GPA General Manager John Benavente on Wednesday morning asked the Consolidated Commission on Utilities to allow GPA to lower its fuel surcharge, called the Levelized Energy Adjustment Clause, or LEAC.
The 5-cent per kilowatt hour cut that GPA seeks would be about a 20.3% reduction to the current LEAC rate, which is the most expensive part of a customer's monthly power bill.
At the reduced rate, the average customer using 1,000 kWh of energy a month would get a bill of $306.32, according to Benavente's presentation.
If approved, it will run from Feb. 1, 2025 to July 31, 2025.
The possible reduction in rates comes after the $100 monthly energy credit ratepayers have enjoyed since June 2022 expired in September, without funding.
High fuel oil costs and surcharges have driven record high power rates in the post-pandemic years.
Current LEAC rates are at 26 cents per kWh through Jan. 31, representing a bill of $359.52 for the average customer using 1,000 kWh a month.
It's the second-highest rate through the past decade, the Pacific Daily News has reported.
Rates were only higher between November 2022 and May 2023, after the Russian invasion of Ukraine spiked the price of oil and drove the average power bill to $400 a month, PDN files show.
Benavente on Monday told the CCU that a barrel of fuel oil GPA needed to run its generators is now at about $100, down from $116 earlier this year.
It could come close to about $95 a barrel, he added.
"What we were used to before is about $80, $85, a barrel so still not where it was before," Benavente told the CCU.
On the subject of fuel costs, CCU Commissioner Simon Sanchez is hoping for the best.
"Pray for world peace, so it doesn't get crazy in the Middle East," he said.
GPA is also getting caught up on fuel oil costs, after fronting about $47 million during the pandemic to stave off power bill hikes while the island was shut down.
Benavente said GPA is on track to be about $4 million in the hole, or "under-recovered" on fuel costs by the end of January 2025.
This past January, GPA was $33 million in the hole on fuel costs, PDN files show.
Benavente told utility commissioners that GPA is still on track to knock power bills down further, with the activation of the new, more efficient Ukudu power plant in September 2025.
He said this past September that falling oil prices and the Ukudu plant could bring the LEAC rate down to just 12.37 cents per kWh, about half of the current rate.
The last time customers saw a fuel surcharge like that was in February 2020, when the average customer paid $229.08 a month on a LEAC rate of 13.4 cents per kWh.
Announcement of GPA's plans to seek a lower LEAC rate comes just a day before the CCU's Thursday meeting, where commissioners will pick up discussion of evaluations for top officials at GPA and the Guam Waterworks Authority.
Leadership could get raises, if their evaluation scores warrant it.
LEAC discussion was already scheduled for this week on the CCU's annual meeting calendar, but commissioners in October opted to postpone final talk of performance evaluations until Nov. 21.
Benavente declined a raise last year, as customers faced hundreds of hours of rolling blackouts post-Typhoon Mawar, and still high power bills.
Power oversight chair Sen. Will Parkinson, who slammed the possibility of raises for utility leadership this time last year, was quick to endorse the proposed rate reduction Wednesday.
He called on the CCU and the Public Utilities Commission to expedite the approval of the lowered rates.
"The affordability of essential utilities is critical to the well-being of our community," Parkinson said. "Lowering the LEAC rate not only eases the financial strain on our citizens but also stimulates our local economy by increasing disposable income for families and small businesses."
