Is the Public Utilities Commission aware of its function?

Dear Editor,

The Public Infrastructure Minister is reported to have expressed his disappointment at the performance of Guyana Power & Light (GPL).  I arrived at my office at 9 am yesterday morning only to find it without electric power, the same state that drove me from it the day before.  After waiting for two hours in the hope of restoration and having no change, I returned home to salvage part of the day.  My neighbour’s generator alerted me to the same condition as pertained at the office.  For the next three hours, I experienced four interruptions, the last ending at around 4 pm.  Disappointment is not the term that comes to mind.

Shortly before, GPL had announced record first-half revenues of $17 billion for this inferior service.  Revenues have two components: sales and prices.  In the same report, it was stated that sales increased marginally to 394.8 kWh.

So a company could only generate record revenues from marginal sales if prices increased substantially.

Yet I do not blame GPL.  The utility is a monopoly and is only acting as any such entity would – maximizing its revenues the way monopolies do by controlling price and/or supply levels.

 

In all countries with market economies, of which Guyana is a subset, monopolies are illegal except when regulated by an authority established to usurp the monopoly powers to set prices and supply.

Here, this authority is the Public Utilities Commission (PUC).  But sadly, GPL’s performance would attest to this authority not functioning.

So, to help understand what is happening at the PUC, here are some questions for it and I ask that answers be given publicly:

 

  1. What is the approved rate of return (RoR) for GPL?
  2. What is the achieved RoR for year 2016 and first-half 2017?
  3. When last were rates approved for GPL?
  4. What portion of the energy rate is fuel in $/kWh?
  5. Is GPL’s fuel adjustment approved monthly? If not, at what frequency?
  6. What is the approved heat rate, a measure of generation efficiency, for the utility?
  7. What is GPL’s performance compared to the approved heat rate?
  8. How is heat rate factored into the recovery of fuel cost by the utility?
  9. What incentives are given GPL to reduce unaccounted-for losses?

10.What incentives are given GPL to avoid disconnections, and thus loss of revenues, during routine maintenance?

Second, a couple of months ago, I wrote the CEO of Guyana Water Inc (GWI) about an apparent anomaly in its billing where the minimum charge is added to actual usage to produce the total bill.

A minimum charge represents the floor a customer is expected to pay when usage is below the minimum usage.

This was also brought to the attention of the PUC.

I’m still awaiting a reply and would like to take this opportunity to inquire as to the PUC findings on this matter.

These happenings at these utilities, which are supposed to operate under the oversight of a regulatory body, raise the question of whether the PUC is aware of its function.

Yours faithfully,

Louis Holder

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