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GPA pushes for cleaner fuel, bond refinancing

By Bea Cabrera

The Guam Power Authority has laid out plans to carry out its clean energy master plan that is projected to be achieved by 2035.

During a virtual media briefing held Tuesday, GPA general manager John M. Benavente said the agency's overall goal is to protect the island's environment and ease the ratepayers' burden.

The master plan seeks to reduce costly power bills and increase power reliability, resiliency and quality, he added.

John Benavente

To aid the master plan, Benavente discussed two crucial bills that GPA will endorse at public hearings tomorrow.

Bill 212-36 would allow GPA to refinance its 2012 bond at a substantially reduced interest rate that would result in an annual saving of $15 million for GPA and the ratepayers.

Bill 213-36 would allow GPA to relocate a new reserve clean fueled generator in Piti, retire aging power plants that would improve power reliability and room for producing renewable energy and power storage.

Benavente said Bill 212-36, if passed into law, would allow GPA to refinance $265.08 million of the $305.74 million in outstanding bond.

“At today's rates, we're looking at 5 percent interest rate of this balance. Refunding the 2012 bond would project 3.2 percent interest, which will result in an annual debt service savings of about $15 million," he said. "If you're paying, say, $2,000 a month today, the refinancing will reduce monthly payments to about $1,500."

He added that bond refinancing would lower power bills by 2025.

"What we're trying to do is reduce the payments for the customers of today because the investment that is all put into the system is going to actually benefit everyone over the next 20 years," Benavente said.

"Why should the people, the customers of today, pay for all the investments that others are going to utilize in the future to save? This is a utility model that's typically used and it's really a fair way to distribute the cost of infrastructure,” he added.

Bill 213-36 would pave the way for the use of renewable energy on Guam.

“This is an exemption that will allow us to relocate the 41-megawatt power plant from Ukudu to Cabras Island in Piti. It will also help us retire costlier and older machines that are 30 years old today," Benavente said.

"For the past 60 years, we have been burning fuel oil, which is cheaper but the emissions are substantially dirtier than the new fuel that we will use which is also low in sulfur. We need to change the way we generate power most especially if we're going to renewable," he said.

Benavente said he is aware of the relocation plan's potential impact on the community there.

“We have reached out to the village, and the Municipal Council. We have reached out to the Port Authority of Guam whose employees go to work there with emissions coming down from the Cabras plant and the middle school, which is directly impacted by this bill,” he added.

Benavente said the addition of a new power plant will cut the surcharge that ratepayers are paying today, from 17 cents to about 8.2 cents per kwh by December 2023.

“It is going to produce 20 kilowatt-hour per gallon of fuel, which is a huge efficiency difference and will facilitate additional renewables into the system and achieving 100 percent renewable energy by 2045. It is projected to provide low-cost reserves even during natural calamities and rainy days," he said.

The new power plant is also designed "to meet load growth that includes military and ancillary civilian loads" and "retire aged conventional generators which are not 25 to 47 years old.”


Currently, Public Law 22-23 is in place restricting the construction and operation of any fossil fuel generators within 1,500 ft of a school.

Benavente said Bill 213-36 would exempt GPA from this restriction.

“We believe that this law was put in for new power plant and power generation way back in the 1970s when the Navy turned over the property to the Guam Power Authority," Benavente said.

"The new 41-mw plant will be burning ultra-low sulfur diesel and consumption will be a lot less than any power plants that are here today," he said.

He added that the new power plant will burn fuel based on current technologies that emit a 3 percent highest probability exposure period, which is safe for humans.

“The plant will be permitted by Guam Environment Energy Association and Ultra Low Sulfur Diesel of Guam to ensure compliance with current and future ambient air standards," Benavente said.

"We have a support letter from the Municipal Council and Mayor Atalig has already publicly noted that they are going to provide us with that support. Unjustified delays subject GPA and its ratepayers to substantial penalties and jeopardize GPA’s ability to provide adequate energy to Guam,” he said.

The legislature is scheduled to hold public hearings on Bill 212 and Bill 213 on Thursday.

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