Guam News - Guam News
Senator Ada says that his Bill #489 would repeal the so-called PILOT charge, which was enacted 27 years ago.
In a release, the Senator states that "Governor Eddie Calvo's Department of Administration (DOA) sent GPA...an invoice for $12 million...representing 14 years of prior year assessments."
GPA has warned the Calvo Administration that payment of the charge would result in another increase in power bills.
The release quotes Senator Ada as saying "GPA does not have any surplus funds that are in excess of what is needed to operate and maintain our island’s power utility.”
The measure is co-sponsored by Senators Rory Respicio and Adolpho Palacios.
READ Senator Tom Ada's release in FULL below:
Senator Tom Ada Proposes Additional Rate Relief to GPA Power Bills Hagåtña, Guam: Senator Tom Ada introduced Bill 489-31 (COR), an act to
provide rate relief to the people of Guam by repealing the annual Payment-in-Lieu-of-Taxes (PILOT) charge currently assessed to the Guam Power Authority (GPA).
According to Sen. Tom Ada, “Bill 489-31 seeks to repeal a 27 year old law that, if implemented, will result in another rate increase to residential and commercial rate payers in order to make GPA’s compliance possible.”
Bill 489-31 was introduced today, July 17, 2012, and is co-sponsored by Senators Rory J. Respicio and Adolpho B. Palacios, Sr.
The PILOT charge established by Public Law 18-15, was never enforced by any other administration until Governor Eddie Calvo's Department of Administration (DOA) sent GPA a bill pursuant to the PILOT law. Last year, DOA sent an invoice for $12 million to GPA, representing 14 years of prior year assessments. GPA has warned the Calvo Administration that any amount paid by GPA, now and in the future, will have to be
obtained through a rate increase resulting in higher power bills.
Under this law, GPA is required to pay the Government of Guam $875,000 annually “as a reimbursement to the General Fund for benefits received from services provided by the Government of Guam. These services include police and fire protection, road systems, and other governmental facilities in support of GPA’s operations, and protection of its assets.”
Sen. Tom Ada believes that this law presumes GPA has surplus funds, and can afford to make payments without any consequences to our island’s ratepayers. “GPA is constantly petitioning the Public Utility Commission (PUC) for rate increases to recover its costs, which unfortunately translates to increases in residential and commercial power bills. GPA does not have any surplus funds that are in excess of what is needed to operate
and maintain our island’s power utility,” said Sen Tom Ada.
“GPA continues to warn the Calvo Administration that making any payments pursuant to the PILOT statute will result in increased power bills. This means that our people will be paying twice to subsidize the Government of Guam’s operations. We already pay once as tax payers, and again as rate payers because GPA will raise their rates in order to make its payment for the PILOT charge,” said Sen. Respicio.
“This bill is companion legislation to Sen. Tom Ada’s Bill 484-31, which seeks to refinance GPA bonds and ensure that the savings results in lower power bills for all of GPA’s customers,” added Sen. Respicio.
Sen. Palacios noted “the PILOT charge is also assessed to the A.B. Won Pat Guam International Airport (GIAA) and the Jose D. Leon Guerrero Commercial Port of Guam (PAG) for Police service they receive, despite the fact that these agencies have their own Police Force.” Sen. Palacios said “Like GPA, the annual assessments will be passed on to their customers, who will then have to pass on these additional charges to its patrons.
These charges are unjustified and will surely contribute to the increasing cost of living on Guam.”
The PILOT charge, mandated by Public Law 18-15, requires GPA, GIAA, and PAG to each pay an annual fee of $875,000 to the Government of Guam. “The PILOT charge is an unjustifiable fee which should not be imposed on our autonomous public agencies. Implementing this law will drive up the cost of doing business on Guam, and creates an upward pressure on the cost of living. This PILOT fee is double taxation, and must be repealed immediately,” emphasized Sen. Tom Ada.
In the meantime, the senators are appealing to Governor Calvo to understand how implementing this antiquated law after 27 years negatively impacts island residents and businesses, and to be sensitive to the everyday struggles affecting the people of Guam.
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