Hybrid power plant cushions the impact of global energy crisis on Guam

By Pacific Island Times News Staff

The newly commissioned Ukudu Power Plant protects Guam customers from the full impact of global fuel volatility amid the ongoing conflict in the Middle East, according to Guam Power Authority.

“Ukudu is proving to be a game-changer for Guam’s power system,” said John M. Benavente, GPA general manager. “At a time when global fuel markets are experiencing significant volatility, the efficiency of this plant is helping shield our residents and businesses from much larger increases that would have otherwise occurred."

The 198-megawatt power plant in Dededo, which came fully online in late December, is a combined-cycle facility that uses significantly less fuel to

 generate electricity than older units, utility officials said.

The Ukudu plant,which uses ultra-low sulfur diesel and potentially liquefied natural gas, is part of GPA's strategy to diversify its energy portfolio and replace its aging plants in Cabras.

GPA said its analysis shows that the plant is substantially reducing the potential impact of global fuel price increases on customer bills.

Savings generated from the new plant enabled GPA to cut levelized energy adjustment clause, from 20 cents to 15 cents per kWh.

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LEAC, also known as fuel surcharge, is a pass-through charge that fluctuates based on the price of oil and other fuel-related costs. It is adjusted periodically, typically every six months, to reflect changes in fuel costs.

Benavente has recommended maintaining the current fuel surcharge rate through the remainder of the current review period, which runs from Jan. 1 through July 31.

GPA continues monitoring global fuel market volatility following the geopolitical conflict between the United States and Iran known as Operation Epic Fury.

The Iran-war triggered global energy crisis worsens amid strikes on infrastructure. Prices are soaring as energy supplies tighten due to the closure of the Strait of Hormuz, a key shipping channel through which about a fifth of the world’s oil typically flows.

John Benavente

On Guam, Benavente said the Ukudu plant is reducing the potential impact of global fuel price spikes on customer bills by more than half.

GPA’s analysis also shows that the Ukudu Power Plant could reduce potential system fuel exposure by more than $50 million over the next several months compared with operating the system without the new plant. 

“This translates to an approximate 53 percent reduction in customer impact under modeled fuel price scenarios, with customers seeing much smaller increases on their monthly bills than they would have without the plant,” GPA said.

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Under current projections, an average residential customer using 1,000 kilowatt-hours per month could see increases ranging from about $11 to $39 under modeled fuel price scenarios, depending on how global fuel markets evolve. 

The $600-million power plant in Dededo, which took more than a decade of planning, development and construction, will replace GPA's aging infrastructure

and strengthen the islandwide power system.

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