Utility body challenges power tariff hike
Stabroek News
June 2, 2002
Public Utilities Commission (PUC) Chairman, Prem Persaud, says the commission has challenged the tariff increases being sought by the power company and argues that the rates cannot be implemented from today.
The Guyana Power and Light Inc (GPL) has filed final return certificates seeking to justify a 13.91% rate hike for the year as against an earlier request for 15.89% and the actual eight per cent implemented in the first quarter.
Speaking with Stabroek News yesterday, Persaud said the commission had problems with the company's accounts, as certain items were not being reconciled. He would not elaborate on these but said that GPL could not implement new rates until the PUC was satisfied and the accounts were properly authenticated.
The commission yesterday dispatched a further letter to GPL on the issue seeking answers, which were also not provided, to an earlier request on the proposed tariff hikes and further clarifications on the accounts.
The PUC had earlier asked the company what the effective rate of increase would be for the rest of the year, given that an eight per cent hike was effected in the first quarter and the full requirement for the year was calculated at 13.91%.
However, the list of queries by the commission was reported to have increased significantly.
Persaud said yesterday that he had been provided with no schedule setting out the rates under the different tariff heads and as such the company could not implement a new rate structure.
Repeated efforts to contact Chief Executive Officer of GPL, John Lynn, yesterday failed. According to the licence granted to GPL, once the final return certificates have been sent to the PUC, along with a certificate of compliance by the independent auditors, then the rates proposed become automatic within 14 days of the filing.
The 14 days expired some time ago, but the company had proposed to implement the new rates from today.
Concerns have been expressed that under the current PUC Act, the body was devoid of any watchdog powers to protect consumers' interest and was a mere rubber stamp as it could not effectively challenge rate increases by GPL unless supported by a certificate of non-compliance by the auditing firm, KPMG.
The licence granted to GPL takes precedence over the Act where the two are in conflict.
Meanwhile, an unresolved issue with the PUC is non-compliance by GPL management with the performance benchmark targets set.
The commercial and line loss targets were not met and these are equivalent to a loss of about $1.5 billion, $0.1 billion more than the deficit GPL is seeking to recover in increased tariffs.
Persaud said he hoped to have a ruling on this issue shortly. Consumer advocates have argued that these inefficiencies were built into the rate mechanisms because if the losses had been reduced, the company would not have needed to increase rates, as the $1.4 billion deficit would not have arisen.
GPL has a moral obligation to announce rate increases to the public before they become effective.
It is likely that no such announcements have been made because the firm may not be in a position to proceed on the matter now.