Water rates going up

-but PUC mandates improvements by GWI

The Public Utilities Commission (PUC) via  Order No 2 / 2018, dated 7th June, 2018, has approved an application by the Guyana Water Inc. (GWI) for an increase in tariffs.

 The decision was announced in a media release from the PUC which stated that, “After careful consideration of the views expressed by the various stakeholders namely the GWI Officials, Consumers Association and the members of the public, the Commission hereby   approves the following rates to be implemented in two phases.  The first increase will be made effective from 1st October 2018 and the final increase will be made effective from 1st October 2019.  The implementation of the increases in a graduated format is an attempt to alleviate the financial burden on the consumers when compared to the last implemented charges as awarded under Order 3/2005.”

According to the Order, there will be adjustments to existing tariff bands, introduction of new tariff bands, introduction of a fixed charge, reduced tariffs for pensioners over the age of 65 years, and increases in existing ancillary charges and the introduction of new ancillary charges.  

 The new charges for metered residential consumers, as listed in Appendix One of the Order, as of 1st, October, 2018, will comprise of a monthly fixed charge of $250 and monthly consumption charges of (1) $86 per cubic metre for consumers in the $60.90 category, while (2) all other consumers will pay $112 per cubic metre. As of 1st October, 2019, the monthly fixed charge will be $500 and the monthly consumption charge $112 per cubic metre.

The new monthly fixed charge for unmetered residential consumers, as of 1st, October, 2018, will be $250, along with a monthly consumption charge of $1,100. As of 1st, October, 2018, these charges will be increased to $500 and $1,450, respectively.

There will no fixed monthly charges for metered pensioners, but the monthly consumption charge will be $74 per cubic metre for the first ten (10) cubic metres, and $86 for each cubic metre thereafter, from 1st October, 2018, with an increase to $112 for each cubic metre thereafter, from 1st October, 2019. Unmetered pensioner consumers will incur no monthly fixed charges while their monthly consumption charge will be a flat fee of $740 per month.

There are new charges for metered non-residential and unmetered non-residential consumers, the latter group of which includes small, medium and large commercial and industrial consumers, along with new sewerage tariffs.

Among the twenty-nine listed ancillary charges with new prices as of 1st October, 2018, are non-residential connection fee ¾” or less ($16,000), residential connection fee ¾” or less ($10,000), residential reconnection non-voluntary ($7,500), and residential disconnection voluntary ($4,000).

GWI had submitted an application to the PUC on 9th January, 2018 for the approval in rates, and at the PUC’s first public hearing on this application, the Commission had directed that the audited financial statement for the year ended 31st December, 2016 be submitted at the next hearing, so that the Commission could arrive at an informed decision on the impact that the new rates would have on the Company and the consumers. The statement was submitted at the April 11th hearing, and confirmed that the company’s claim that it was operating at a significant loss.

The PUC statement said that there have been no increases in tariffs since 2005, and notwithstanding government’s substantial interventions to the company since 2005, the GWI has been unable to cover its operations, maintenance and depreciation charges.

The Commission in its statement further noted that the current application for an increase in rates would not return the company to profitability and government subventions may still be required for the company to achieve its objectives as detailed in its 2017 – 2021 Strategic Plan.

As a condition to the granting of the increased rates for the various categories of users GWI will be required to meet several targets and to report its performance to the Commission bi-annually, commencing from the 1st January 2019.

Among the targets set by the PUC are: specific percentage reductions in non-revenue water over the next three years culminating in a figure of four percent (4%) onwards from 2021 until it accounts for less than 15 percent of total production, the metering of un-metered of 5,000 and 12,000 consumers in 2018 and 2019, respectively, and by 20,000 consumers each year from 2020 and thereafter, until 100 percent of all services are metered;  the consumer database should be continuously sanitized to reflect legitimate debtors and should be accomplished no later than 30th June 2019;  and collection rates on annual billings should increase incrementally each year to a level of  96 percent by the end of December 2020. 

   The PUC is chaired by Dela Britton, and its members are Commissioner Maurice Solomon, Commissioner Rajendra Bisessar, Vidiahar Persaud, Secretary/Legal Officer and Moorsalene Sankar, Financial Analyst.

 

 

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