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Back Local News GPA’s upcoming fuel surcharge may be reduced further

GPA’s upcoming fuel surcharge may be reduced further

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THE Guam Power Authority’s next fuel surcharge rate may go down further after the Public Utilities Commission approved only $1.022 million out of the $1.9 million requested by the Guam Power Authority for a contract that would put into motion the development and implementation of liquefied natural gas (LNG) as a fuel source for the island.

The contract cost will be incorporated into the fuel surcharge, or Levelized Energy Adjustment Clause (LEAC), a ratepayer expense which reflects fuel and other fuel-related costs expended by GPA to provide power.

The $1.9 million represented the power company's request for the February to July LEAC period. The Public Utilities Commission will tackle the power company's LEAC filing at its January 2014 meeting.

GPA is already petitioning for a reduction of about 1.08 percent.

"The LEAC will be reduced even if we included the entire $1.9 million requested. But it will go down more now because the commissioners did not approve the entire $1.9 million, so it will be a little lower," said Frederick Horecky, PUC's legal counsel.

Reservations

Horecky said the commissioners only approved the $1.022 million which will fund tasks related to the development and implementation of liquefied natural gas.

These tasks include addressing procurement issues as well as plant transition and closures.

However, the commissioners expressed reservations about funding the program management services component of the petition and requested that GPA provide more information about costs and specific tasks covered by the performance management contract of its contractor RW Armstrong.

"The commissioners felt that utilizing the LEAC as a funding source for the (performance management contract) is not appropriate. Usually, it would be funded through bond funds or the base rate. GPA would have to identify a source of funding," Horecky said.

In its entirety, GPA's resolution indicated a $3.9 million appropriation request for a project management service contract with RW Armstrong for the agency’s Integrated Resource Plan, which includes using liquefied natural gas as a power generation source.

"They did not, at this time, approve the funding source for the particular task for programmatic services. However, they allowed GPA to come back and justify this and identify a funding source with a more detailed breakdown per task," said Joaquin Flores, GPA general manager.

"We have six months to move forward with the liquefied natural gas implementation for now," he added.

According to GPA’s petition, the power company's management "has determined that continuing the project management services would be in the best interest of ratepayers to implement the IRP and liquefied natural gas strategy in a timely and efficient manner to maximize savings to customers."

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