Guam power customers to pay additional $58 in fuel surcharge effective July 1

By Pacific Island Times News Staff

Beginning July 1, Guam's ratepayers will see an in increase in their elecrticity bill following the Public Utilities Commission's approval of fuel recovery charge adjustment petitioned by the Guam Power Authority.

The fuel surcharge, otherwise known a levelized energy adjustment clause, will increase from $0.135840 per kilowatt-hour to $0.194150 per kilowatt-hour.

For an average residential customer using 1,000 kilowatt-hours per month, the approved adjustment will result in an estimated increase of approximately $58 per month.

The new rate applies through Jan. 31, 2027.

GPA said the fuel surgcharge increase, supported by the Consolidated Commission on Utilities, was "in response to extraordinary fuel cost increases tied to global fuel market volatility and impacts to fuel supply."

“This adjustment is not intended to recover the full projected fuel under-recovery at once," said John M. Benavente, GPA general manager.

"It is intended to keep that balance from growing while helping ensure GPA can continue purchasing fuel and spread fuel cost impacts over time, rather than asking customers to absorb a larger increase all at once," he added.

According to a press release from GPA, there were several options for addressing the fuel under-recovery..

"A full recovery approach would have required a higher LEAC rate and a larger monthly bill increase for the average customer," GPA said.

The utility agency defended its petition to raise the fuel surcharge, saying that retaining the current rate would increase under-recovery and create greater pressure on GPA’s ability to purchase fuel and increasing the risk of larger impacts in future LEAC periods.

"The approved adjustment reflects the middle approach: bringing fuel recovery closer to actual costs while spreading fuel cost impacts over time," it said.

GPA said that even with the approved adjustment, the combined base and fuel surcharge rates will be approximately 32 cents per kilowatt-hour for average residential customers and remain among the lowest rates in the region based on GPA’s regional rate comparison chart as of May 15.

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Fuel shipment costs have increased sharply since the recent geopolitical 

conflicts. GPA’s March fuel cost shipment was at $26.2 million, while the April shipment increased to about $53.5 million.

GPA said its most recent fuel shipment cost for May is about $37.9 million, with continuing pressure on fuel recovery and cash flow.

"GPA has worked to lessen the impact of global fuel volatility by holding the LEAC steady since March, managing fuel purchases carefully, evaluating alternative fuel supply options, applying available Ukudu liquidated damages to GPA’s fuel under-recovery balance, relying on the Ukudu power plant’s efficiency and using available solar energy to reduce the amount of fuel needed to serve customers," GPA said.

GPA said the PUC review noted that additional measures were implemented by the agency to to mitigate the impact of fuel cost increase, such as applying Ukudu liquidated damages directly to the LEAC under-recovery balance and securing approval for a short-term line of credit to help support fuel purchases during the current period of elevated fuel prices.

GPA gave assurance that the surcharge increase would not be used for payroll, debt service, capital projects or general operations.

The LEAC is the mechanism used to recover the actual cost of fuel needed to generate electricity for customers.

As Guam moves into warmer months, GPA encourages customers to look 

for simple ways to reduce daily energy use, especially from air conditioning

 and water heating.