PUC approves Guam Power Authority base-rate adjustment tied to new Ukudu power plant

The Guam Public Utilities Commission on Dec. 22 approved a one-time adjustment to Guam Power Authority’s base rates to help finance the new Ukudu Power Plant and meet obligations under a federal consent decree. The commission adopted the administrative law judge’s proposed order and joint consultant rates, authorizing GPA to implement the joint rates on Jan. 1, 2026.

The petition, filed Aug. 8, 2025, relied on testimony from GPA General Manager John Benaventi and Chief Financial Officer John Kim and joint consultant analyses from Marianas Consulting Group and GPA’s utility consultants. GPA argued the increase is necessary to fund fixed costs for operations, maintenance, infrastructure improvements and debt service for the new plant. “The base rate supports new construction that allows GPA to reduce fuel use over time,” said Tracey Limtiaco, assistant general manager and acting general manager of the Guam Power Authority.

Consultants recommended allocating Ukudu’s fixed costs primarily to energy charges, increasing the residential customer charge to $25 per month while lowering the per-kilowatt-hour price on the first 500 kWh to reduce impacts on low-usage households, and evaluating a targeted low-income bill support program. The consultant analysis projected that, even with the base-rate increase, fuel-efficiency gains from the Ukudu plant would produce net fuel savings that could offset or reduce overall bill impacts for many customers.

The commission’s record also shows differing fiscal projections: MCG projected a net shortfall and under-recovery in fiscal year 2026 even with the proposed rates, while GPA and its consultants presented a plan that relies on anticipated fuel savings, insurance proceeds and other recoveries. The ALJ and consultants recommended additional reporting and safeguards — including billing the Navy for past self-insurance charges and analyzing standby-generation cost allocations to the Navy — to reduce future under-recovery risk.

Commissioners discussed whether and how the base rate could be lowered later if fuel savings materialize. GPA representatives said future reductions would be considered as projects come online and the integrated resource plan is updated. The commission approved the order by voice vote; individual roll-call tallies were not recorded in the transcript.

Next steps: GPA may implement the joint rates Jan. 1, 2026, and the PUC will monitor recovery and may reopen LEAC or base-rate proceedings if under-recoveries grow and adjustments are required.