SENATORS are expected to vote on substitute Bill 426-31 tomorrow after spending a week perusing and making amendments to the Fiscal Year 2013 budget.
Among those amendments was from Sen. Tom Ada who sought to reduce power rates by refinancing the Guam Power Authority’s bond obligations.
The amendment was adopted with no objections.
“Given the current low interest rates available on the financial market, GPA can seek to refinance some of its older debt under more favorable terms,” Ada said in a statement.
He cited a measure he introduced earlier, Bill 484-31, which gives GPA the authority to refinance its debt. A public hearing was held on the measure and the testimony was generally positive. However, the senator believes that by including the language of the legislation into the budget bill, the process would be quicker for GPA.
“By adding language authorizing GPA to refinance its debt service obligations, [GPA] will be able to explore financial solutions at least 30 to 60 days sooner than if we pursued it through separate legislation,” Ada said.
“Given recent increases to power rates and the tough economic climate, it is imperative we move quickly to provide our local residents and businesses with this substantial rate relief,” he added.
Ada stressed, though, that while the agency has worked hard to receive consideration from lenders, “this window of opportunity will not last indefinitely, nor will the low interest rates we currently see on the market. It is for this reason that we must move quickly and efficiently to capitalize on this opportunity.”
Ada said the amendment also requires that within 30 days of securing a refinancing of its debt, GPA must return to the Public Utilities Commission and submit a request to reduce current power rates for customers.
“This legislative initiative will result in an estimated $8 million in annual savings, and provide an immediate relief to ratepayers by reducing the impact of recent rate increases by GPA,” Ada said.
PUC recently approved a base rate increase, effective May 1, that would yield an estimated $9.1 million per year in revenues to GPA. The proposed refinancing contemplated by Ada’s legislation would effectively roll back a majority of the rate hike.
Session resumes at 9 a.m. tomorrow and can be watched live on either MCV Channel 13 or GudTV Channel 21.
