Eloy Hara, a utilities commissioner years ago, was among those who recently went public to essentially dismiss the value of Guam’s senators’ and Gov. Lou Leon Guerrero’s duty to scrutinize the proposed new power plant deal. They need to try to understand what’s in it and how it would affect Guam’s ratepayers and the community in general.
“They will definitely not be able to handle a much more technical and complex multibillion-dollar contract,” Hara claims.
The governor, as well as the senators, should find out – before the deal is signed – what this proposed agreement would mean to consumers, businesses and the economy in general. It’s also part of the senators’ and the governor’s power to get the opinion of energy-industry and finance experts for a crucial third-party review of this deal.
The executive branch and the Guam Legislature have the power to help shape – and set – our island’s energy policy.
We support Sen. Clynton Ridgell’s call for an oversight hearing on this matter. The Consolidated Commission on Utilities and subsequently the rate regulator Public Utilities Commission should suspend any decision on this deal until the lingering questions have been cleared up.
One can argue that CCU commissioners were elected by the voters, but they have so far been more of a consenting ally to the Guam Power Authority – even approving pay raises of top-level managers illegally, behind closed doors – rather than serving as an advocate for the interest of the ratepayers and the rest of the public.
A lot has changed since GPA first made the pitch to build a massive power plant. GPA argued it faced $352 million in fines from the U.S. Environmental Protection Agency for the pollution its plants discharge into the air. Two of the four main air polluters were knocked out of commission by the explosion and fire at two Cabras power plants several years ago.
Since GPA first made the case for one massive power plant years ago, the USEPA has, as recently as in June this year, according to Reuters and other news agencies, finalized its plan to relax limits on greenhouse-gas emissions from power plants.
And yet GPA still is proceeding with one massive power plant fueled by ultra-low-sulfur diesel without asking USEPA if it could get more time to figure out a more environmentally friendly balance between more solar energy for homes, government buildings and businesses and maybe a smaller but new power plant. The last time Guam tried to get an exemption or extension of time from USEPA was during the Obama presidency in 2012.
It doesn’t take an engineer or another expert with technical know-how to give these things some thought. What’s important is GPA and CCU should not move full-throttle on something that was initially projected to cost $400 million to build and now would cost as much as $600 million.
When GPA first took this power plant idea on a road tour to get public support, it told the community the base rate portion of power bills would not increase. Now GPA is saying the base rate would increase but other costs, such as for fuel, would fall, so customers’ power bills would still decrease.
And what about the checkered past of GPA’s chosen bidder, South Korea’s Korea Electric Power Co.? At a recent meeting, Michelle Voacolo, president of the Micronesia Climate Change Alliance, asked commissioners if they were at all concerned about negative news regarding KEPCO, which has faced charges of corruption in the past. A former vice president of KEPCO was among 100 officials and suppliers charged with corruption over faked safety certificates for nuclear reactor parts in 2013 on the heels of the Fukushima disaster in Japan, the Voice of America has reported.
Given ratepayers’ history with GPA’s past assurances, it really doesn’t hurt to be cautious.
And all these concerns are not necessarily something GPA’s technical people would think of in the interest of ratepayers. That we know from experience.