PUC lowers LEAC for six months to offset part of GPA base-rate hike

The Guam Public Utilities Commission voted unanimously on Dec. 22 to reduce the Levelized Energy Adjustment Clause (LEAC) for the six-month period Jan. 1–July 31, 2026, from about 15.55¢/kWh to 13.584¢/kWh. The ALJ and PUC consultants said the reduction is intended to pass anticipated fuel savings from the Ukudu Power Plant through to customers while cushioning the impact of GPA’s approved base-rate increase.

ALJ and consultant reports cautioned there are significant uncertainties: GPA projected an LEAC under-recovery of roughly $14.5 million as of Dec. 31, 2025, and MCG estimated a potential under-recovery of roughly $10.2 million by July 2026 if sale proceeds of excess ultra-low sulfur fuel oil or liquidated-damages payments from the plant vendor are not realized. The ALJ noted GPA proposes to apply liquidated damages owed by the plant vendor toward under-recoveries, but the commission heard questions about the timing and certainty of such collections.

The ALJ concluded the reduction is appropriate given the balance of benefits to ratepayers and manageable downside risk if PUC monitors and adjusts the LEAC in future filings. “Worst case, if there were a $10,000,000 under recovery at the end of the next 6 months, PUC comes back and resets the LEAC,” the ALJ said, describing the adjustment process the commission uses to reflect changing fuel prices and recoveries.

GPA acknowledged the reduction could create an under-recovery in the short term but said it intends to pursue sale of excess fuel and to apply any recoveries to reduce under-recovery amounts. The commission adopted the ALJ’s recommended LEAC figure and associated tariff changes by voice vote.

Next steps: PUC and GPA will monitor actual fuel sales, vendor payments and under-recovery levels and may adjust the LEAC in subsequent filings if necessary.