WITH the threat of a power rate increase looming because of a 27-year-old law that supports an annual Payment-in-Lieu-of-Taxes (PILOT) to be assessed to the Guam Power Authority, a bill seeking to repeal the law was introduced by Sen. Tom Ada yesterday.
Bill 489-31 (COR), which seeks “to provide rate relief to the people of Guam,” was co-sponsored by Sens. Rory J. Respicio and Adolpho B. Palacios Sr.
The PILOT charge was supported by Public Law 18-15 but was never applied until recently, when the Guam Department of Administration sent an invoice for $12 million to GPA reflecting 14 years worth of assessments.
In response, GPA notified the Calvo administration that any payment made by the utility will be obtained through a rate increase.
Respicio said: “GPA continues to warn the Calvo administration that making any payments pursuant to the PILOT statute will result in increased power bills. This means that our people will be paying twice to subsidize the government of Guam’s operations. We already pay once as tax payers, and again as rate payers because GPA will raise their rates in order to make its payment for the PILOT charge.”
Public Law 18-15 requires GPA, A.B. Won Pat International Airport Authority of Guam, and Jose D. Leon Guerrero Commercial Port of Guam to pay $875,000 annually to the General Fund as reimbursement for “benefits they received from services provided by the government of Guam, including police and fire protection, road systems, and other governmental facilities in support of GPA’s operations, and protection of its assets.”
“The PILOT charge is an unjustifiable fee which should not be imposed on our autonomous public agencies. Implementing this law will drive up the cost of doing business on Guam, and creates an upward pressure on the cost of living. This PILOT fee is double taxation, and must be repealed immediately,” Ada emphasized.
The senators are now “appealing to Gov. Eddie Calvo to understand how implementing this antiquated law after 27 years negatively impacts island residents and businesses, and to be sensitive to the everyday struggles affecting the people of Guam.”
