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PUC approves LEAC increase to 19.415¢/kWh as GPA, ALJ cite fuel‑price shock
Summary
Facing a global fuel‑price disruption, the PUC approved GPA’s requested increase in the secondary LEAC to 19.415¢/kWh for July 1, 2026–Jan. 31, 2027; the ALJ and commissioners described the increase as a pass‑through measure that reduces the risk of under‑recovery and preserves GPA’s ability to purchase fuel.
The Guam Public Utilities Commission voted to raise the Guam Power Authority’s secondary levelized energy adjustment (LEAC) from 13.5840¢/kWh to 19.4150¢/kWh for meters read on and after July 1, 2026 through Jan. 31, 2027.
The ALJ framed the petition against a recent fuel‑market shock: the closure of the Strait of Formosa and related events that pushed crude prices toward $275 per barrel. "When the fuel price goes down, LEACs are reduced; when it goes up, it has to be increased," Anthony said. The ALJ laid out three options—full recovery, partial recovery (the option GPA selected), or no increase—and recommended the partial increase as the option that best balances ratepayer impact and GPA’s need to avoid an under‑recovery that could threaten fuel purchases.
ALJ and consultant materials showed different under‑recovery estimates depending on price assumptions; the ALJ noted GPA had applied ~$20 million in liquidated‑damage proceeds to offset LEAC impacts and had established a $70 million line of credit to prepay fuel shipments.
Commissioners asked about the market model used to forecast fuel costs (MOPS versus Morgan Stanley indices) and the expected under‑recovery. Mr. Kim and other commissioners discussed near‑term purchase timing and projected shipment costs. After discussion Commissioner Peter moved to adopt the ALJ’s recommendation and set the secondary LEAC at 19.4150¢/kWh; the motion passed unanimously.
The order records the PUC’s adoption of the ALJ recommendations and asks GPA to continue reporting on fuel‑savings from new generation and future under‑recovery projections.
