By Mar-Vic Cagurangan, Dana Williams and Naina Rao
Frequent power outages are becoming a deplorable norm for Guam, disrupting residents’ normal routines. Unfortunately, the island is not about to see it end anytime soon.
This month, the Guam Power Authority notified customers of a monthly potential outage schedule. “Outages will be conducted according to the schedule if the anticipated demand from customers between 4 p.m. and 11 p.m. exceeds GPA’s available energy capacity. GPA will, as a last resort, implement rotating outages lasting up to one hour,” the public advisory said.
GPA’s major projects that are touted to be Guam’s energy salvation have hit a snag. Typhoon Mawar caused irreparable damage to the Ukudu power project’s nearly complete fuel and water tanks. The plant was originally scheduled to be up and running by the first quarter of 2024.
“The delays to the Ukudu Power Plant and renewable energy projects present significant challenges for GPA to meet the demand over the next two years,” according to John Benavente, GPA’s general manager. “The retirement of the nearly 50-year-old baseload Cabras plants is overdue; as such, the plants have decreased capacity and reliability and increased repairs with longer completion timeframes.”
The current state of GPA’s infrastructure thus foreshadows two more years of power outages.
While Guam currently does not have data that quantify the economic costs of frequent power outages, empirical evidence denotes their impact on the island’s productivity. "The Chamber is concerned about the frequent power outages and is putting together a working group to discuss the implications of this challenge and stress on our businesses and the community," said Catherine Castro, president of the Guam Chamber of Commerce.
Surveys conducted by the chamber after the devastating Typhoon Mawar in May indicated that Guam businesses incurred damage costs ranging from $10,000 to $2 million caused by the storm, with subsequent losses resulting from protracted power, water and internet outages.
Benavente said GPA has partnered with researchers from several national laboratories and universities to conduct a study on the impact of power outages on customers. “Under the Frontier Project funded by the U.S. Department of Energy’s Energy Transition Initiative, GPA along with its partners investigated customers’ cost impact during outage events through surveys and evaluation of local costs to develop tools to justify projects and programs to reduce outages and improve resiliency,” he said.
The final report is still pending with the U.S. Department of
Energy. In the U.S., the department recently reported that power outages cost American businesses $150 billion annually.
To mitigate the impact on the tourism sector, Guam’s main industry, Benavente said GPA has removed its circuits in areas in Tumon from rotating outage schedules.
“Their circuits are only load-shed if an emergency outage occurs outside the hours of 4 p.m. to 11 p.m.,” he said. “Additionally, some large customers and government agencies have partnered with GPA through the interruptible load program (ILP). These ILP partners voluntarily switch to their standby generators during peak demand periods, helping to minimize outages for residents including businesses. The ILP partners are credited on their accounts for utilizing their standby generator.”
Sen. Will Parkinson, who chairs the legislative committee that oversees utilities, said the outages cost money for individuals and businesses. “The problem with power outages and the load-shedding on Guam is it affects so many layers of people's lives,” he said. “Because on the one component, there's just the basic inconvenience of having power outages. But then you go another layer deeper, and you see things like damage to appliances.”
Damage that occurs during power surges can be associated with outages, Parkinson said. Under a law championed by Parkinson’s father, the late Speaker Don Parkinson, GPA is financially responsible for appliances damaged by a bad power supply. “As I've been doing these town halls, I found another layer that I didn't even anticipate, and that was people talking to me about damaged medical devices,” he said.
People who lose medical devices have to wait at least a month for replacements, so he is trying to work with GPA to have a pre-approval process for compensation claims involving medical equipment.
Parkinson said the calls about damaged equipment started after Typhoon Mawar. “But as the months went along, I kept getting more and more calls,” he said. “And then as the load-shedding kind of reached a peak a little bit before Thanksgiving when we had four or five outages in a single day, then I got a lot of calls regarding broken appliances, people with broken fridges and ruined food and just things of that nature.”
Claims for damaged appliances have to be made within 90 days. Business owners have also complained about damaged computers and other electrical equipment.
“Beyond just the financial costs of the appliance itself, it's also the time involved,” Parkinson said. “New equipment has to be located and installed, and “all of that takes time, energy and focus away from other much more critical things that the businesses should be doing. You're stuck in maintenance mode when they should be in making money mode.”
Benavente said although load-shedding is not always associated with fluctuations, businesses can file a damage claim with GPA if they believe that their electrical appliances and devices have been damaged as a result of surges or fluctuations in power.
“If it is determined that the damage to your electrical appliances was caused by something within GPA’s control, you may receive compensation,” he added.
To ease the burden of power expenses, the government has implemented the Prugråman Ayuda Para I Taotao-ta Energy Credit Program, which has been extended four times, giving ratepayers $100 monthly credit on their electricity bills. Total funds applied as a credit to all GPA customers totaled about $84.4 million as of Nov. 30, 2023, Benavente said.
Dr. Roseanne Jones, professor of economics at the University of Guam, said despite additional costs incurred by businesses due to the need for generators and adjustments to the changing power landscape, these challenges are temporary. She doesn’t think it will put local businesses and stores out of business. “I think it's just an additional cost of doing business that may translate into higher costs for customers,” she said.
While additional costs due to load-shedding exist, Jones doesn’t think they are as significant as the overall cost of energy.
For the most part, Jones said, GPA can be commended for its approach to load-shedding by announcing its schedule. “That’s a new development in this, that it’s actually being timed and calculated,” Jones said, adding that it provides advance notice to allow businesses and households to plan accordingly,” she said.
In the last 25 years she has lived on Guam, Jones said there were times in the past when the load-shedding had longer duration and without certainty as to when it would begin and end. “And some of this would go on for weeks at a time,” she said.
What causes the power outages? Benavente enumerated a host of factors that exacerbate GPA’s aging power plants. Typhoon Mawar also significantly
damaged the Yigo 20MW combustion turbine.
The Covid-19 pandemic impacted the material, equipment and personnel supply chain delaying the project for nearly two years. Delayed government permits and legislative approvals extended months to critical milestones of completion dates and the loss of reserve generation capacity, with revised commissioning in 2024.
In late 2019, a procurement protest blocking GPA’s award of a 40MW
renewable energy project was finally resolved in 2022. While the Office of Public Accountability andthe Superior Court upheld GPA’s procurement decision, the contract did not proceed due to the increased project costs.
“Additionally, since 2002, GPA has implemented performance management contracts to ensure preventive maintenance, regular overhauls, and timely repairs by specialized teams of engineers and technicians when generators
undergo regular maintenance, and the current outage situation is attributed to an energy capacity shortfall rather than poor maintenance practices,” Benavente said.
Parkinson has introduced legislation to speed up the procurement process for GPA as the utility works on temporary power generation and repairing diesel generators. If the measures pass in the January session, he said the island might avoid load-shedding next summer.
“I guess I'm just disappointed in the state of affairs. I remember what load-shedding was like when I was a kid. It's really sad to see it rear its ugly head again,” he said. “But you know, as far as GPA is concerned, while I do my best to hold them accountable, I also want to be a partner in finding and implementing solutions.”
Jones pinpointed Guam’s reliance on fossil fuels as the real cost of concern. The
territory’s high expense of importing fossil fuels, coupled with shipping and handling costs, significantly contributes to overall expenses for businesses and households.
With only 5 percent of Guam's power generation sourced from alternatives like solar, Jones emphasized the necessity for Guam to transition into more sustainable and cost-effective energy sources.
“With the fossil fuel costs rising, and solar technologies coming down in cost, there's this trade-off and shift that are some gains to the economy,” she said, adding that social valuations of a green, cleaner environment can lower carbon emissions, ultimately decreasing fuel costs.