Commission approves $10M land purchase

CABRAS: Guam Power Authority's Cabras power plants are shown in 2016. GPA plans to ween off the Cabras plants and build a new power plant. Post file photo

The initial list of more than a dozen companies interested in building Guam's next major power plant has been whittled down to seven.

Guam Power Authority management updated the Consolidated Commission on Utilities with its shortlist of qualified potential offerors on Tuesday.

The trimmed-down list includes one Norwegian firm, two Japanese firms and four South Korean firms, said GPA General Manager John Benavente.

They are:

• South Korea-based energy supplier Hanwha Energy;

• Korea Electric Power Corp. and East-West Power;

• Osaka Gas Company, a Japan-based overseas energy supplier involved in leasing of LNG tankers, and development and investment in oil and natural gas;

• POSCO Energy, a major private energy producer in South Korea;

• Samsung C&T Corp., parent company of South Korea's Samsung Group;

• Toyota Tsusho Corp., a Tokyo-based parent of Toyota Group, which has an energy division that produces electricity using natural gas, oil and coal; and

• Wartsila, operating out of Norway and a global business that offers "smart" technologies for the marine and energy markets.

Out of the running

Eliminated from the initial list are APTIM, Green Globe Solutions, Guam Power Partners, Korea Midland Power, Korea Southern Power, Proman Global Development, Shanghai Electric Power, Sojitz, Summit Power Group, Taiwan Electric and Mechanical Engineering Services and Karpower International. Karpower is the group that initially proposed a floating power plant on a ship.

The rejected companies either could not meet the financing experience required, hadn't developed outside of their home countries or were affiliates of other competing companies. One was noncompliant with the project from the beginning, Benavente added. The companies can still protest the decision.

GPA plans to build a 180-megawatt power plant on land near the Harmon power substation. Public Law 102-34 consolidated the land and rezoned the properties for industrial use.

The utility intends to purchase the land for $10 million using insurance settlement proceeds from the Cabras 3 and 4 power plants, which were destroyed in an explosion and fire in August 2015.

The owners of the land are represented by attorney Ray Haddock, landowner Ray Aguon and attorney Mark Cowan.

Benavente said GPA hopes to bring the technical specifications for the new plant to the Consolidated Commission on Utilities by June 5. The Public Utilities Commission also has to approve the project specifications and the land purchase.

These initiatives take place amid a backdrop of increasing renewable energy sources and rising fuel prices. GPA has promised to maintain the current power rate throughout the construction and commissioning of the new power plant.

The contractor will be responsible for financing and constructing the plant, but infrastructure work needs to be done to prepare the site.

GPA recently entered into a settlement agreement with its insurers on the Cabras plant and generators, receiving about $125 million in total.

Of that amount, $80 million remains in GPA coffers and is intended to fund infrastructure development at the site of the new power plant. This should allow GPA to maintain its promise to ratepayers, Benavente said.

Various energy sources

The new power plant will use the more expensive ultra-low-sulfur diesel, but should be more able to adjust to renewable energy sources, which are weighing on the older slow-speed units in use today.

Benavente has said that upcoming renewable energy products can help offset the cost of fuel for the new plant by reducing demand for oil. The plant should also be able to use liquefied natural gas.

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