Public utilities: Consumers needprotection from monopoly exploitation
Consumer Concerns
By Eileen Cox
Stabroek News
February 23, 2003
“The dramatic events of the past two weeks with two very important bills being rushed through parliament have caused many consumers to conclude that we have reached the end of the road. We are now poised at the edge of a cliff. A strong breeze or even a fit of nerves will send us toppling into the abyss below.”
That was the opening paragraph for my column on November 2, 1997, in the Sunday Stabroek. Let us recall what were the reactions to the new PUC bill that was rushed through parliament on 24 October, 1997.
Sunday Stabroek, October 12, 1997: PUC consultants urge opposition to the new utilities bill’;
Stabroek News, October 24, 1997: `PUC bill will not guard against monopoly exploitation - Tyndall.” On the Government side, these headlines appeared:
Stabroek News, October 14, 1997: ‘New bill strengthens utilities commission’s power to hire lawyers.”
On October 25, the Stabroek News reported that, “The government yesterday ignored a walkout of parliament by the three minority parties and passed the Public Utilities Bill 1997 and two other bills linked to the proposed joint venture deal with a Canadian firm for the GEC.” There was a demonstration outside of Parliament during the debate on the bills.
The two other bills were the Electricity Sector Reform Bill 1997 and the Guyana Energy Agency Bill 1007.
Why was the new PUC bill generating such concern? In a 30-page brief, entitled “Observations on the Public Utilities Commission Bill and the end of regulations,” Mr Joseph Tyndall gave his views. In the section, ‘The essential purpose of Public Utility Regulation and the Commission’s Authority,’ he commented:
“The amendments to be discussed in this section have one thing in common. They fail to recognize the essential objective of public utility regulation.” He continued:
“The essential purpose of public utility regulation is to protect the consumers from monopoly exploitation.”
This objective cannot be overstressed. The Guyana Consumers Association and the Consumers Advisory Bureau have found that even in the judiciary there is a lack of understanding, and the law of contract can take precedence over utility regulations.
The new PUC act compels the Public Utilities Commission to give effect to agreements. Section 21 (2) of the new act states:
“In carrying out the functions set forth in subsection (1), the Commission shall be bound by and shall give effect to the provisions of the Guyana Energy Agency Act 1997, the Telecommunications Act 1990, any other law governing a public utility subject to the Commission’s jurisdiction, the terms of any agreement between the government and the public utility, between the government and an investor, which agreement is in relation to the privatisation or capitalisation of the public utility.” Consumers and opposition parties have no input when agreements are being drawn up. Therefore this obligation is obnoxious. Mr Tyndall comments:
“With the proposed amendments, the Commission will be powerless to protect consumers, however serious the damage to their welfare.” The present suggestion to put a cap on the PUC’s penalty orders illustrates how consumers can be affected when agreements are made and no consideration given to the objections of stakeholders. The consultations between the government and stakeholders show that the importance of consultation is at last recognized. Nevertheless, there is reluctance to consult with Mr Joseph Tyndall who is versed in utility regulation. Some consumers have been suggesting that we look for hydro-power generation. It is extremely surprising to learn from a release by Synergy Holdings Inc. that Guyana Power and Light shows reluctance to meet with them for discussions. Synergy Holdings states that Amaila Falls can supply power to GPL at G$12.75 per kwh for energy.
Where there is life there is hope. Let us hope that good sense will prevail in all quarters.
