PUC greenlights new power plant

A 198-megawatt power plant designed to meet Guam's future energy needs has been approved.

The PUC decision gave the Guam Power Authority the green light to sign a 25-year deal with South Korean utilities giant KEPCO to build and operate the facility.

It's taken about five years for GPA to finally get the approval of its plan to add new capacity to meet future demand. PUC Administrative law judge Fred Horecky says the commission is satisfied that while the base rate may rise, there'll be an even larger offset.


"The new plant is going to be so much more efficient than the existing plants that there will be savings of from $50 to $60 million as a result of using less fuel," he said.

Then there were the concerns of the renewable energy industry and utilities oversight chairman Clynt Ridgell who oppose the new low sulfur diesel plant for its continued reliance on fossil fuels. Horecky says they all support renewables, including GPA, but for the immediate future.

"A system cannot rely on solar alone," he said. "You need to have an integrated system that has back up fossil fuel plants as well to maintain the power system. The approach that the commission had, and has, is to incorporate renewable into the system but to do it in a careful and cautious manner to ensure that the people of Guam continue to receive firm, reliable power."

Also looming large were the U.S. EPA's environmental mandates. GPA faced millions of dollars in fines for the non-compliance of its aging generators. It settled for what Horecky says is a comparatively small amount of $400,000.

"If the PUC had declined to approve the power plant that would have jeopardized everything," Horecky said. "And it could have lead to first of all, a suit by the federal government, fines of up to $600 million, uncertainty as to what the future power situation would be. And that's a real issue here because without the plant, if the plant were not built, where would Guam be left?"

The PUC voted unanimously to approve the project. GPA can now finalize its 25-year deal with the Korean Electric Power company to build, operate and transfer the 198-megawatt plant in Dededo.