Electricity tariffs are expected to increase in 2003 as long as the high price of fuel on the world market persists.
This was the forecast from Chief Executive Officer of the Guyana Power and Light (GPL) John Lynn yesterday during a media tour of some of the company’s stations.
Lynn told the media that three years ago GPL was paying only US$10 per barrel of diesel, but now the price has gone up to US$30. He said some other fuels are selling at US$26 per barrel and beyond. “So something is likely to happen to the tariff next year arising from the rise in fuel oil (prices).” Lynn noted that “rising fuel oil prices are bad news for any electricity company no matter where you are in the world.”
The CEO also spoke on a number of other issues including the stealing of electricity by some big businesses and government agencies. Lynn said GPL has been able to reduce commercial losses by identifying some of those persons who are stealing electricity.
Lynn contended that some of the companies now turning to self-generation are reacting to receiving what are now accurate electricity bills.
A front page article in yesterday Stabroek News indicated that a number of large companies are disconnecting themselves from GPL’s network. Some of these companies are: BK International on Mandela Avenue and DIDCO at its Ruimveldt warehouse and its KFC and Pizza Hut outlets, but Lynn said the unofficial figure that his company has is between 5 and 10 businesses.
He said: “There are a number of people who have traditionally self-generated and they continue to do so. And some people have increased the amount of self-generation, but in some cases the fact is, we are now billing them for all the electricity they used. Why wouldn’t they take it from us if they were not getting charged for it?” Lynn asked.
He related that GPL recently corrected the meters of two processing industries and in both cases the billing went up from 2,000 units a month to a whopping 200,000 units. Lynn noted that a lot of people have been complaining about their bills skyrocketing, “but actually a lot of those people have been benefiting from electricity for a long time but not having it registered on their meters, not getting bills for it and not paying for it.”
The CEO disclosed that a large industrial company in Georgetown has seen the number of units consumed go up by 250% in the last two months, while another well-known institution has had several metering locations corrected. He said the institution has many other branches and under the former Guyana Electricity Corporation some of those branches were not metered.
He said companies have a right to turn to self-generation, “but I wonder if those generators are subjected to the same environmental and other scrutiny that the generators of GPL are subjected to. The noise, the extent of pollution, oil leakages that pollute the ground water... Are all these precautions appropriately being taken?”
He said it was right that the Environmental Protection Agency (EPA) enforce such rules in relation to GPL “so I hope that those precautions are being adopted by customers who are self-generating.”
Asked how the move by some of the big companies might affect the power company, Lynn said, “we don’t have enough evidence at the moment. On one side you would lose some revenues from the people, but on the other side the fact that they are taking less demand on the system means that less investments would be required, so that is a complicated equation to work out.”
He alluded to what was reported earlier in this newspaper saying that while occasionally GPL would have power outages which may last for hours a broken generator could require days to fix. He mentioned one particular business, which had a significant problem with its generator, and had to connect to GPL for a couple of days. He noted that the generators the companies are using would have to be maintained and when that happens they have no other alternative.
Lynn said there are also a lot of problems that are associated with self-generation: “You buy a new generator and you switch it on in the morning you are probably not going to have any problem, but in a year or two down the line when you have been running it 24 hours a day and may not have been maintaining it properly problems will arise and the whole issue of which is cheaper would only be realised then.”
Lynn also asked the media what was wrong with GPL disconnecting somebody who was not paying their bills. He argued that if a person does not pay for the electricity he uses, somebody else has to pay for it. “The people who are paying their bills are effectively subsidising those who are not paying.”
He denied allegations that the company only concentrated on the small customers and ignored the large companies when it comes to disconnection.
He pointed out that GPL over the years has spent a lot of time cleaning up the big businesses, industries and government agencies as much as it has done to small customers. He said they have disconnected some large businesses already for the year. “We are not concentrating on one sector. What we are saying is that if you use electricity you have to pay for it.”
Commenting on the order which the Public Utilities Commission issued earlier this year for the company to pay back customers some $1.3 billion because they were overbilled, Lynn said, “basically what GPL did was that we appealed against that ruling and obtained a stay from the court to prevent any implementation of the order.”
He said it is now left to the court to hear the arguments from both the company and the PUC with regards to the rights and wrongs of the issues. Lynn said GPL is currently talking with the PUC and the government and is hoping for an amicable solution to the problem.
On the issue of estimated meter readings Lynn said, “estimated readings have been a problem but in the last six months we have employed additional meter readers and we decreased the number of estimates from 25% to 17%. He said, “some of these meters are inside of properties, or people have instructed security guards not to let us in or there might be a dog that would not let us in.”
Looking to the new year, Lynn said amidst all the complaints from citizens, customers could look forward to a bright 2003 with GPL.
“Sure there were a lot of complaints but people have also acknowledged services have improved especially in the Demerara area.” He conceded that Berbice has suffered from poor service over the years but said GPL is committed to changing that. According to him, the problem in Berbice is a result of one of their main sets being down and a study of the problem revealed that it would take several months to have it fixed.