BY DANIEL M. PEREZ
Journal Staff
The Public Utilities Commission approved a petition from the Guam Power Authority to adjust its Levelized Energy Adjustment Clause, also known as the LEAC, effective Wednesday, July 1, driving up the average monthly residential power bill by approximately $58.
The fuel recovery charge will rise from $0.135840 per kilowatt-hour to $0.194150 per kilowatt-hour for meters read through January 31, 2027.
The adjustment follows an earlier approval by the Consolidated Commission on Utilities in response to an estimated $27 million fuel under-recovery driven by global market volatility and escalating fuel shipment costs. The 5.8-cent per kilowatt-hour increase means an average residential customer consuming 1,000 kilowatt-hours monthly will experience an immediate financial shift.
John Benavente, general manager of GPA, said that the middle-approach adjustment aims to keep the under-recovery balance from expanding while spreading out the financial impacts. "This adjustment is not intended to recover the full projected fuel under-recovery at once," Benavente said. "It is intended to keep that balance from growing while helping ensure GPA can continue purchasing fuel and spread fuel cost impacts over time, rather than asking customers to absorb a larger increase all at once."
The utility faced severe cash flow pressures after fuel shipment costs spiked due to recent geopolitical conflicts. GPA paid $26.2 million for its March fuel shipment, which then surged to approximately $53.5 million in April before settling at about $37.9 million in May. To mitigate these impacts, GPA applied liquidated damages from the Ukudu Power Plant directly to the under-recovery balance and secured a short-term line of credit to support ongoing fuel purchases.
Despite the adjustment, the combined base and fuel surcharge rates for Guam remain among the lowest in the region at approximately 32 cents per kilowatt-hour. Guam’s total rate sits at $0.3204 per kilowatt-hour, keeping it below nearby jurisdictions such as Saipan, which registers at $0.4902 per kilowatt-hour. Officials noted that the clause does not fund payroll, debt service, capital projects, and general operations, serving strictly as a mechanism to recover the actual costs of generation fuel. mbj
Journal Staff
The Public Utilities Commission approved a petition from the Guam Power Authority to adjust its Levelized Energy Adjustment Clause, also known as the LEAC, effective Wednesday, July 1, driving up the average monthly residential power bill by approximately $58.
The fuel recovery charge will rise from $0.135840 per kilowatt-hour to $0.194150 per kilowatt-hour for meters read through January 31, 2027.
The adjustment follows an earlier approval by the Consolidated Commission on Utilities in response to an estimated $27 million fuel under-recovery driven by global market volatility and escalating fuel shipment costs. The 5.8-cent per kilowatt-hour increase means an average residential customer consuming 1,000 kilowatt-hours monthly will experience an immediate financial shift.
John Benavente, general manager of GPA, said that the middle-approach adjustment aims to keep the under-recovery balance from expanding while spreading out the financial impacts. "This adjustment is not intended to recover the full projected fuel under-recovery at once," Benavente said. "It is intended to keep that balance from growing while helping ensure GPA can continue purchasing fuel and spread fuel cost impacts over time, rather than asking customers to absorb a larger increase all at once."
The utility faced severe cash flow pressures after fuel shipment costs spiked due to recent geopolitical conflicts. GPA paid $26.2 million for its March fuel shipment, which then surged to approximately $53.5 million in April before settling at about $37.9 million in May. To mitigate these impacts, GPA applied liquidated damages from the Ukudu Power Plant directly to the under-recovery balance and secured a short-term line of credit to support ongoing fuel purchases.
Despite the adjustment, the combined base and fuel surcharge rates for Guam remain among the lowest in the region at approximately 32 cents per kilowatt-hour. Guam’s total rate sits at $0.3204 per kilowatt-hour, keeping it below nearby jurisdictions such as Saipan, which registers at $0.4902 per kilowatt-hour. Officials noted that the clause does not fund payroll, debt service, capital projects, and general operations, serving strictly as a mechanism to recover the actual costs of generation fuel. mbj
