---

Public hearings began this week before the Public Utilities Commission on the Port Authority of Guam’s request for interim rates to help recover operating costs and fund portions of the modernization plan. Included in the request is the plan to increase fuel bunkering and throughput fees at the port.

“The port’s tariffs have not been increased in 17 years and our aging facility has not seen any significant upgrades in that time period,” said Port General Manager Glenn A. Leon Guerrero.

“We know we need to modernize and upgrade the port to meet the growing needs of our community, improve our financial performance and the level of service and productivity we provide to the people.”

The Port recently launched the Modernization Program which calls for more than $200 Million in upgrades to the facility to bring it to world-class standards. The updated Master Plan included a financial strategy that was approved by the Legislature and signed into law by the Governor. The strategy calls for $100 Million in federal grants and loans to fund the first phase of the Modernization Program. However, the Port says it currently does not have enough revenues to meet the debt service of the pending $50 Million USDA loan that most likely will be approved in the near future.

“These interim increases are needed to recover costs and to help us make our debt service on the anticipated loan,” Leon Guerrero said. “We also need these additional funds to support our planned Maintenance and Replacement Capital Program so that we have funds available to maintain our equipment to keep our port running and able to service our people. If we are going to modernize and upgrade our port then we need to be able to perform routine maintenance on the new equipment and technology.”

Fuel throughput and Bunkering fees

Requested increase – Fuel bunkering & throughput fees from 125% to 150%. These are said to be cost-recovery based tariff increases.

The fuel throughput and bunkering fees are proposed to increase up to 150% as supported by an appraisal prepared by Captain, Hutapea & Associates (CHA).

In reviewing the tariff rates, CHA concluded that seven ports in the region had throughput import rates ranging from $0.41 (American Samoa) to $1.01 (Darwin, Australia) per barrel. After excluding the high and low indicators, CHA identified a range of $0.45 to $0.62 per barrel. The comparable Guam rate of $0.16 per barrel was considered to be “extremely low on a comparative basis.”

According to the CHA appraisals, the resulting rates for fuel throughput and bunkering will still be at the low end of the market range.

Cargo Handling charges (including labor charges)

Requested increase – 3.4%

Cargo Handling services include the activities related to the mooring and unmooring of ships, loading and offloading of ship’s cargo and the movement of goods around PAG.

The proposed rate adjustments are said to be necessary to ensure that revenues keep pace with PAG’s costs, including maintenance and replacement capital and loan payment coverage.

The first public hearing for the PUC request was held on January 25th at 6 p.m. in Hagatña.

Today a public hearing will be held at 5 p.m. at the Asan Community Center followed by a public hearing in evening at 7 p.m. at the Dededo Senior Citizens Center. The final event will be a PUC Special Meeting to be held at 6 p.m. on Friday, January 29th at the PUC office in Hagatña.