The Guam Power Authority recommended that the Consolidated Commission on Utilities postpone action on an interim Levelized Energy Adjustment Clause (LEAC) adjustment increase proposed by the Administrative Law Judge assigned to the Public Utilities Commission docket.
Under GPA Docket 26-13, the Administrative Law Judge recommended that the CCU consider increasing the LEAC from 19.4150 cents per kilowatt-hour to 28.2708 cents per kilowatt-hour (kWh). According to GPA, if implemented the proposal would increase the average residential bill for 1,000 kilowatts per hour by approximately $88.56 per month effective Oct. 1 through Jan. 31, 2027.
"Customers with higher electricity use, including businesses, could see a greater dollar impact. The recommended adjustment would still leave approximately $27 million in unrecovered fuel costs at the end of the period," GPA said in a release on Tuesday.
“Electricity is a necessity for every home and business on Guam. An average increase of nearly $89 a month for average residential customers is significant, and ratepayers who use more electricity could see an even greater impact,” GPA General Manager John Benavente said.
He recognized the impact that increased power costs could have on families and businesses in Guam.
After discussions, the CCU tabled the proposed interim LEAC adjustment until Friday, providing GPA additional time to determine whether fuel costs can be recovered over a longer period and reduce the immediate impact of a sharp increase on customers.
GPA said as of Aug. 27, the LEAC fuel under-recovery was at approximately $36 million in incurred fuel costs not recovered through the LEAC.
"Because GPA must pay for fuel before those costs are fully recovered through customer bills, sustained high fuel prices have placed significant pressure on cash flow. GPA’s September fuel shipment totaled approximately 250,000 barrels, with payment of $42 million required by the end of September," GPA said.
GPA has implemented cost-saving measures to preserve liquidity and meet the upfront fuel obligation, including limiting hiring, freezing salary increments and increases, streamlining expenditures and vendor payments, and using available cash reserves and operating funds.
"Those resources have also been affected by the financial impacts of Typhoons Sinlaku and Bavi, including lower revenues and additional storm-related expenses," GPA said.
GPA is also trying to secure a $70 million fuel-purchase line of credit, which is currently moving through the procurement process.
"The line of credit does not eliminate fuel costs or replace the LEAC. It is a short-term financial tool intended to provide liquidity for fuel purchases while those costs are recovered through the LEAC over time," GPA said.
On Monday, Bill 356-38 introduced by Sen. William Parkinson, will have a public hearing to weigh providing a three-month energy credit to power customers for September, October, and November 2026. If passed, GPA customers would see some relief, with a $100 energy credit applied to their accounts for the prescribed months using $20 million in excess fiscal 2027 Section 30 funds.
"Though GPA takes no position on the appropriate funding source or legislative mechanism, GPA supports the intent of providing direct assistance to ratepayers during a period of extraordinary fuel-cost pressure," GPA said they asked Sen. Jesse Lujan the chair of the legislative committee on utilities to support the measure.
GPA has also asked Governor Lou Leon Guerrero for help to identify other federal and local funding, grants and resources that could assist in addressing the LEAC under-recovery or providing direct relief to ratepayers.
"Additionally, GPA has asked Del. James Moylan to assist in identifying federal resources and helping advance outstanding Federal Emergency Management Agency reimbursements dating back to Typhoon Mawar, GPA said.
The PUC meets on Thursday to consider GPA Docket 26-13.