Guam News - Guam News
The amendment was adopted without objections this past Thursday. Senator Ada had already introduced a bill to accomplish the same goal but he says its inclusion in the budget bill will "accelerate the adoption process.“
The amendment would allow GPA to refinance its bond obligations at a lower interest rate and save GPA roughly $8 million dollars a year "and provide an immediate relief to ratepayers by reducing the impact of recent rate increases by GPA,” said Senator Ada in a release.
In the release the Senator is quoted as saying: "The proposed refinancing contemplated by this legislation would effectively roll back nearly all of the recently approved rate hike."
Read Senator Ada's release in FULL below:
Senator Tom Ada Amends Budget Bill to Reduce Power Rates
Hagåtña, Guam (August 24, 2012): On Thursday, August 23, Senator Tom Ada was able to place an amendment on Bill 426-31, the 2013FY budget bill, to reduce power rates through a refinancing of GPA’s bond obligations. The amendment was adopted with no objections.
“Given the current low interest rates available on the financial market, GPA can seek to refinance some of its older debt under more favorable terms,” said Senator Tom Ada.
Senator Tom Ada had earlier introduced Bill 484-31, authorizing GPA to pursue a refinancing of its debt, and the bill had a favorable Public Hearing on August 14, 2012.
However, the inclusion of the language within Bill 484-31 into the 2013FY budget bill will accelerate the adoption process. “By adding language authorizing GPA to refinance its debt service obligations, the Authority will be able to explore financial solutions at least thirty to sixty days sooner than if we pursued it through separate legislation,” said Senator Tom Ada. “Given recent increases to power rates and the tough economic climate,
it is imperative we move quickly to provide our local residents and businesses with this substantial rate relief,” he continued.
Additionally, Senator Tom Ada noted, “GPA has worked hard to gain favorable consideration from its lenders to refinance its debt, but this window of opportunity will not last indefinitely, nor will the low interest rates we currently see on the market. It is for this reason that we must move quickly and efficiently to capitalize on this opportunity.” To ensure that ratepayers realize these savings, the amendment also requires that, within 30 days of securing a refinancing of its debt, GPA must return to the PUC and submit a request to reduce current power rates for customers.
“This legislative initiative will result in an estimated $8 million in annual savings, and provide an immediate relief to ratepayers by reducing the impact of recent rate increases by GPA,” said Senator Tom Ada. The Guam Public Utilities Commission recently approved a May 1 base rate increase that would yield an estimated $9.1 million per year in revenues to GPA. The proposed refinancing contemplated by this legislation would effectively roll back nearly all of the recently approved rate hike.
|< Prev||Next >|