The Judge granted the Nisi Order in response to an application by Ramon Gaskin, a consumer, for Writs of Certiorari Prohibition and Mandamus, directing the power company to show cause why a Writ of Certiorari should not be issued to quash its decision announced Wednesday to increase rates and tariffs effective from today.

The rates of increase proposed are:
(i) 13.9% for residential consumers
(ii) 16.6% for commercial consumers
(iii) 16.6% for industrial consumers.

The summons is returnable for February 10, 2003.

Gaskin's Notice of Motion was issued by Attorney-at-law Mr Mohabir Anil Nandlall.

In Gaskin's affidavit in support of the motion, he said that the Guyana Power & Light Incorporated, a limited liability company duly registered under the laws of Guyana, was granted a licence effective from October 1, 1999.

He noted that it commenced operations under the licence on the same date as a result of a decision of the Government of Guyana to create a new company with a strategic investor as a partner to take over the operations of the Guyana Electricity Corporation (GEC), a State-owned, controlled and managed corporation, to generate and supply a safe, efficient, adequate, reasonable, affordable and nondiscriminatory source of electricity throughout Guyana, except the generation of electricity through hydro-power and to the community of Linden, for a period of 25 years.

According to him, in the negotiations between the Government of Guyana and the investor, the transaction was characterised as a capitalisation transaction because the proceeds were to be injected into the new entity to assist in increasing its capital funds for the investment and to effect certain expansion promises that may be necessary to achieve improvement in the system and the service and to expand and to extend electricity to areas throughout Guyana which hitherto never enjoyed electrification.

Gaskin said that under schedule A attached to the management contract, is a schedule of fees payable for managerial services rendered. The total sum payable annually to this management team is about $740,000,000 averaging about G$5,000,000 per month per person.

The Audited Financial Statements of GPL for the fiscal year ended 31st December, 2001show that the sum of $740,000,000 was paid as Management fees in 2001.

The Management Agreement further provides for payment of staff costs an annual fixed fee element to be paid by GPL quarterly in advance in United States dollars with an inflation escalation to be applied based upon US Consumer Price Index and that all such payments are to be made exclusive of Income Tax, withholding tax and all other taxes and duties.

The GPL has continuously failed to achieve each and every target imposed by the licence, Gaskin argued.

These standards and targets were conceived and designed to ensure that GPL provide a competent, reliable, safe, affordable and efficient service to the public, he said.

The schedule licence recognises two main areas of loss of electrical energy generated and enjoins GPL to reduce these losses significantly over the first five years of their operationsthe consumer added.

He said that in October 1999 technical losses were estimated at a rate of 15 per cent of total energy produced. This type of loss, includes, but is not limited to losses suffered as a result of heat, inefficient line plant, frequency conversion, and other areas of a purely technical/engineering nature, including inadequate number of substations, he said.

Gaskin added that GPL failed, omitted, and or neglected to carry out any or all of the aforesaid projects and plans as is required by their licence ESRA and the PUC Act, and in spite thereof the GPL in breach of both the letter and spirit of their licence, ESRA and the PUC Act, continues to increase electricity rates and tariffs.

The spirit and letter of the licence ESRA and the PUC Act require that the rates tariff increase must be commensurate and bear a reasonable relationship with the expansion programmes and plans provided for, he argued.

He said that as a result of the failure, negligence and omissions of the GPL to carry out the aforesaid expansion plans and to inject the requisite capital, commercial and technical losses continue to increase resulting in a continuous increase in the tariffs/rates structure.