If a regional utility on almost any continent knows that it will not be able to generate enough energy at peak demand, it purchases power from another regional utility that has excess generation. However, if the utility is the only one on an island, there are no other utilities from which to purchase power. The utility must be capable of generating and delivering the power needed by its customers, even at peak demand. This is especially true when the biggest utility customer is a critical military installation.
A still greater challenge exists when line losses and unaccounted-for revenues reach unacceptable levels. This was the challenge for the Guam Power Authority in the 1990s.
The territory of Guam has a total land area of 541.3 km² and a population of over 160,000. It has a unicameral legislative government that includes 21 members, each serving a two year term, and an elected governor and lieutenant governor.
Table 1 – Guam Power Authority Yearly System Losses
The Consolidated Commission on Utilities (CCU) has contracting authority over the electricity and water utilities on Guam. The CCU is made up of five elected members and is also responsible for the selection of the general manager and chief financial officer. The Guam Power Board was created as a public corporation as a result of the Guam Power Authority Act of 1968. Its mission is to “provide reliable electric services as economically, efficiently and safely as possible with courtesy and professionalism to the ratepayers of Guam.”
The Guam Power Authority (GPA) has an average of about 45,000 customers, including 38,000 residential customers. Its largest customer is the United States Navy, which purchases approximately 25% of the total generation. Yearly system loss in 2003 (the last available data) was 8.477%. Although losses had been increasing annually over the past several years (see Table 1), they were less than the losses experienced before the GPA developed a revenue protection programme.
In 1995 the GPA became concerned about its line and revenue losses, and in particular about the increasing number of illegal hookups and increased tampering with meters and seals.
THE REVENUE PROTECTION PROGRAMME
The GPA made a commitment to address the power theft problem as part of its effort to improve the reliability of the system and its economic stability. Between November 1995 and September 1996, the utility investigated 76 cases of theft of service and back billed $2.2 million in lost revenues. Personnel from the utility attended a seminar on revenue recovery in the United States, sponsored by the American Public Power Association, and when they returned to the island they implemented the procedures necessary to develop a revenue protection programme.
They convinced the legislature that power theft was a major concern to the government, and in 1997 the Twenty-Fourth Guam Legislature passed a bill to address the problem. The provisions of the bill included the following.
- Theft of energy is a felony in the third degree. Every person caught stealing will be arrested and booked as a suspect and may stand trial.
- The bill provided for an education and amnesty period during which customers with ‘meter problems’ could have them corrected without being charged.
- The customer can be back-billed for twice the amount of the estimated energy stolen.
- The customer has up to 24 months to pay the back bill, at 12% interest on the unpaid balance.
- Service is disconnected until the back bill is paid or acceptable payment arrangements are agreed.
- There is a reward of up to $1,000 for reporting an illegal connection. The report and the reward are confidential.
- If theft is found at a rental property, the customer and the owner of the property are both held responsible.
- Revenues can be recovered for the entire period of the theft. Previously the utility could only back bill for four months.
The GPA recovered a total of $5,849,634 in the period October 1995 through March 1998. They finalised the programme by having a consultant evaluate the practices that had been established and by conducting training for all employees involved.
With government support and a commitment from their regulating body and the management of the utility, the GPA achieved a significant reduction in unaccount-able losses and an increase in the reliability and economic stability of the utility system.
|TWENTY-FOURTH GUAM LEGISLATURE|
|1997 (First) Regular Session|
|An act to classify unauthorized electrical connections or “illegal hookups” as a theft constituting a felony of the third degree, and to establish fines and penalties for such hookups
Be it enacted on by the people of the territory of guam:
|Section 1. The legislature finds that, according to the Guam Power Authority, there is an increasing number of unauthorized electrical connections or ‘illegal hookups’ on GPA power lines. Theft of electrical current is a growing problem, and is at a point where something has to be done. The legislature finds that during the past year, the dismal state in the unreliability of the power system on Guam constituted a threat to the health and safety of our people. There is no doubt that the people of Guam have suffered tremendously from the incessant breakdowns and failures of the power generating system. In addressing this plight, the people of Guam have banded together commendably. In facing this predicament of powerlessness, many have come to tacitly accept the rate increases by the Guam Power Authority, have come to accept the state of emergency declared by the governor in order to procure power generation from private sources, and have come to adapt remarkably to numerous power outages of varying time lengths that come largely unannounced throughout the day and night.
The legislature therefore finds that unauthorized electrical connections or ‘illegal hookups’ by individuals, contractors, or businesses seeking to avoid paying their fair share of electrical power, is something not to be taken lightly. The legislature finds that more stringent laws are needed in order to help prevent these illegal hookups, and to prevent a useless and illegal drain on our island’s available wattage.