The Public Utilities Commission has approved a request by the Guam Power Authority to establish a line of credit of up to $70 million to manage surging fuel costs tied to global market volatility following the Iran conflict.
The credit line is a short-term financial tool restricted to fuel purchases only and may not be used for payroll, capital projects, debt service or general operations. The actual amount available will depend on what financial institutions are willing to lend, and approval does not mean GPA will immediately draw the full amount.
GPA Chief Financial Officer John Kim said the tool addresses a timing gap between when fuel must be paid for and when costs are recovered through customer bills.
"The line of credit provides short-term liquidity to manage that timing gap," Kim said. "It does not replace the LEAC or eliminate fuel costs. It is a financial tool to support fuel purchases as needed, not a long-term borrowing program."
The urgency is reflected in recent fuel shipment costs. GPA's March shipment totaled approximately $26 million, while April's rose to approximately $54 million. GPA anticipates its next shipment will cost approximately $44 million, based on a projected price of about $168 per barrel for a 250,000-barrel order.
"This approval gives GPA another tool to manage extraordinary fuel cost pressure while continuing to serve customers," said GPA General Manager John M. Benavente. "Our goal is to maintain fuel supply, manage cash flow responsibly, and reduce the risk of sharper immediate impacts to customers."
GPA said the line of credit is part of a broader strategy that also includes holding the Levelized Energy Adjustment Clause steady since March, evaluating alternative fuel supply options and expanding solar energy capacity. GPA has contracted more than 210 megawatts of solar photovoltaics with battery storage to be commissioned by 2029.
The credit line remains subject to oversight by the Consolidated Commission on Utilities, PUC and Gov. Lou Leon Guerrero prior to implementation.