Issue #4: Customers would like to see effects of increase communicated to them
Ratepayer's
Bill of Rights Notice
The Consolidated Commission on Utilities (CCU) has authorized the Guam Power Authority to petition the Public Utilities Commission for an increase in base rate revenues of 19.72% or about $26.9m annually. The increased rate will be phased-in over a two year period. The initial increase in Fiscal Year 2008 will be 13.84% and will increase to 19.72% in the second year. For the first five years the rate increase is in effect the increase will be offset by a streetlight credit surcharge that will return to ratepayers all payments made by the Government of Guam for past due streetlight billings in accordance with a five year repayment plan adopted by the CCU, subject to Public Utility Commission (PUC) approval.
GPA expects to file its petition for the base rate increase on or about September 28, 2007. If approved by the PUC , the rate increase will take effect on or about February 1, 2008.
The rate increase
is needed to resume the Authority’s Capital Improvement
Program of $15 million per year to replace aging generation
and transmission & distribution assets and to install
efficiency improvements. Starting from last fiscal
year, capital spending has been and will continue to
be severely constrained as a result of shortfalls in
GPA’s projected revenue. The rate increase
will establish the required debt service coverage ratio
of 1.75x and effectively satisfy bond covenant working
capital restricted fund requirement. Additionally,
the rate increase is also needed to address critical
operations and maintenance requirements including compensation
issues for some highly skilled positions within the
Authority.
Following are tables of anticipated changes to the base rates in each of the different Rate Schedules:
Rate Schedule R: Residential
Rate Schedule F: Streetlighting
Rate Schedule G: General Non-Demand
Rate Schedule H: Private Streetlighting
Rate Schedule J: General Demand - Single and Three Phase
Rate Schedule K: Small Government Demand - Single and Three Phase
Rate Schedule L: Large Government Service
Rate Schedule P: Large Power Service
Rate Schedule S: Small Government Non-Demand
Note: The numbers in the above tables are estimates and are subject to change during the review process with the PUC. The numbers are subject to the outcome of GPA’s transmission level cost of service study which will be incorporated into the 2/1/08 rate adjustment and a distribution level cost of service study which will be incorporated into the 10/1/08 rate adjustment. GPA is not proposing a change to the lifeline rate at this time.
The
CCU determined that a credit should be established to
encourage the Government of GUam to paydown the Department
of Public Work's arrears. The concept of this
credit is that for any month that the past due streetlight
payment is made in accordance with GPA’s amortization
schedule, the funds would be returned to all ratepayer
classes. For periods that the government does
not make streetlight payments, the credit surcharge
will not be given to ratepayers. In any month that this
credit is applied, the amount credited to each customer
will be $.002154/ kWh times the number of kilowatt-hours
(kWh) billed.
In January 2006, the Guam Power Authority made available for the first time the convenience for residential customers to pay for their monthly power bills with credit cards. Over the last seventeen months the number of customers who paid with credit cards, whether online or in our lobbies, has risen to over 6,000 customers a month. With this increase comes the related increase in banking fees for the convenience provided to our customers. GPA estimates that the merchant banking fees for credit card payments will exceed $500,000 for the current fiscal year. At this time, the Authority absorbs the cost of this benefit. GPA, therefore, is proposing the establishment of a convenience fee in the amount of $2.50. This nominal amount will help recover about half of the fees paid for merchant banking services.
The Federal Emergency Management Agency (FEMA) is requiring government agencies to seek alternatives to manage risk related to natural disasters, etc., and GPA is proposing to develop a self insurance program to enable the Authority to better manage its risks of losses – primarily losses resulting from natural disasters. GPA is proposing that its self insurance fund cap be increased from $2.5 million to $25 million and that the self insurance surcharge also be increased from $.00145/kWh to $.00290/kWh.
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