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PUC allows GPA to buy testing power from Ukadu plant; approves up to $4.9M expenditure citing savings and reliability
Summary
The PUC approved an amendment to the Energy Conversion Agreement permitting GPA to purchase testing and commissioning power from the Ukadu (Ookadu) Power Plant and authorized expenditure up to $4,900,000, with the ALJ finding likely net savings of about $4.4M and a reduction in short-term load‑shedding risk.
The Guam Public Utilities Commission on May 20 approved Guam Power Authority’s request to amend the Energy Conversion Agreement (ECA) with Ukadu Power (GUP) to permit GPA to pay for additional testing and commissioning power, and authorized GPA to expend up to $4,900,000 for that purpose.
An Administrative Law Judge (Fred) presented an analysis concluding that purchasing Ukadu testing power during the commissioning period is justified on both reliability and cost grounds. The ALJ found that, based on GPA’s cost analysis, the incremental power purchased from Ukadu would cost about 15.96 cents per kilowatt-hour compared with an estimated 18.83 cents per kilowatt-hour for GPA’s existing system — a roughly 3-cent-per-kilowatt-hour production advantage attributable to Ukadu’s higher thermal efficiency. Using GPA’s minimum purchase estimate of 31,625,000 kilowatt-hours, the ALJ calculated a gross savings of approximately $9.2 million offset by the $4.9 million in testing‑power payments, producing a projected net savings of about $4.4 million.
Fred told commissioners GPA’s recent peak demand rose from 259 MW in April to about 265 MW in May 2025 and that without additional Ukadu output the system could fall short by up to 44 MW. The proposed amendment allows GPA to purchase testing output to forestall load shedding while other units are overhauled or taken offline for maintenance. The CCU previously authorized the parties to amend the ECA and GPA provided a draft amendment and schedule to purchase testing power.
Under the agreed schedule presented to the PUC, GPA will purchase simple‑cycle testing power from May 30 to June 10 (up to roughly 60 MW in that phase) and then purchase combined‑cycle output from June 10 through Sept. 6 (the ALJ’s figures and GPA schedules showed up to 35 MW available as combined cycle capacity in the earlier schedule for the testing window). GPA projects the plant will reach commercial operation in September 2025 and that commissioning of the steam turbine around June 10 will increase efficiency and generate the larger fuel‑cost savings cited in the ALJ report.
GPA estimates the total payment to GUP for additional testing power at about $4,900,000; GPA projects fuel and efficiency savings of about $9,200,000 from the plant over the same period, producing the net savings estimation in the ALJ report. Fred recommended approving the amendment and the expenditure, noting benefits in avoiding load shedding are difficult to quantify but are material.
Commissioners asked technical and operational questions about testing schedules and the plant’s ramp-up phases; GPA’s John and other utility staff explained testing plans and described how additional capacity will allow GPA to schedule maintenance while maintaining system reserves. Commissioner Mike recused himself from this item.
A motion to approve GPA docket 2512 and authorize up to $4.9 million for purchase of testing power carried unanimously among present commissioners.
