Guam Power Authority gets the nod for $32.5M fuel purchase financing
By Pacific Island Times News Staff
The Consolidated Commission on Utilities today greenlighted the Guam Power Authority’s proposed plan to obtain a loan and a line of credit from two financial institutions—worth a total of $32.5 million—to cushion the impact of soaring fuel prices.
The $22.5 million loan offered by Bank of America and a $ 10 million revolving line of credit with Coast360 Federal Credit Union are two of GPA’s proposed options to boost its financing capacity for fuel purchases.
“Our challenge is to manage the impact of these extraordinary fuel costs on
customers while making sure GPA has the resources needed to maintain a steady supply of fuel,” said John M. Benavente, GPA general manager.
Bank of America’s floating-rate term loan would mature in 364 days from closing. Coast360 Federal Credit Union’s line of credit would be good for three years.
The commission has tabled the discussion on GPA’s third option: a revolving line of credit, from $37.5 million to $70 million, for three years with up to two optional one-year extensions.
“These financing options give us additional flexibility when cash is needed for fuel purchases, without committing GPA to borrow the full amount,” Benavente said.
ADVERTISEMENT
The proposed financing options require approval by the governor and the Public Utilities Commission.
Officials said the proposed strategy would allow GPA to manage the timing of fuel purchase payments relative to cost recovery through customer bills.
“The financing does not eliminate fuel costs or replace the levelized energy adjustment clause, also known as the fuel recovery charge,” GPA said in a press release.
On Oct. 1, GPA raised the fuel recovery charge, also known as the levelized energy adjustment clause, from 19.4150 cents per kilowatt-hour to 28.2708 cents per kilowatt-hour. The new rate will run through Jan. 31, 2027.
GPA anticipates approximately $55 million in revenue from this month's fuel shipment. Final pricing for the October shipment is expected after the pricing period closes on Oct. 7.
ADVERTISEMENT
Fuel prices remain significantly higher than levels at the beginning of the year and continue to fluctuate.
GPA’s average fuel cost was approximately $88 per barrel in January 2026 and rose to more than $222 per barrel in April 2026. The October 2026 cargo is anticipated to cost $185 per barrel.
At the current fuel surcharge rate, GPA estimates fuel under-recovery at approximately $42 million by Jan. 31, 2027.
Subscribe to
our digital
monthly issue
