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Guam power hike could reach 22%

HAGÅTÑA (The Guam Daily Post) — Guam Power Authority ratepayers face a potential increase in their monthly power bill — from 11.9 percent to as much as 22.3 percent — depending on how much of GPA’s increased fuel cost for its power plants it is allowed to pass on.

GPA will be recommending a new fuel-surcharge increase in about two weeks.

The surcharge is a main component of monthly power bills and fluctuates to meet the cost of GPA’s fuel-oil purchases in the international market. A barrel of crude oil recently traded at nearly $60, but actual GPA fuel costs include a premium for refinement and delivery, raising prices by nearly $8 more per barrel.

GPA had recommended recovering half of its fuel cost for the last two fuel-surcharge increases.

With a 50 percent fuel-cost recovery rate, the next surcharge is projected to rise to about 14 cents from about 11 cents per kilowatt-hour. Under a 50 percent cost recovery for GPA’s cost of fuel, the average monthly residential power bill would go up from $212 to $237, or an increase of 11.9 percent.

The utility is projecting a loss of about $18.5 million — the largest in recent years — by the end of January 2018 if the surcharge doesn’t change.

The final recommendation won’t come until Dec. 7, however, and the utility also has included projections for a 75 percent recovery. The fuel surcharge will increase to about 15 cents per kWh at 75 percent recovery. Under a 75 percent cost recovery for fuel, the average monthly power bill would go up from $212 to $248, or an increase of 17.1 percent.

At 100 percent recovery, which also remains an option, the surcharge will rise to about 16.5 cents per kWh. Under a 100 percent cost recovery for fuel, the average monthly power bill would go up from $212 to $259, which is an increase of 22.3 percent.

At its highest point in recent years, the surcharge was about 21 cents per kWh, when fuel-oil prices were hovering at about $100 per barrel. Crude oil prices began to free-fall the following year and prices were at their lowest in February 2016, at just over $28 per barrel.

The Consolidated Commission on Utilities will be the first layer of approval before a new surcharge is implemented.

The Public Utilities Commission, as the rate regulatory agency, has final say on price changes for power.

Source: Marianas Variety : http://www.mvariety.com/cnmi/cnmi-news/local/100381-guam-power-hike-could-reach-22

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