GPL’s US$110m requirement

GPL’s introduction to the media of its new Chief Executive Officer, Albert Gordon and his frank evaluation of the needs of the beleaguered utility is most welcome.

The troubles of the Guyana Power and Light (GPL) and its predecessor, the GEC are legendary and have defeated both the PNCR in its pre-1992 incarnation, the PPP/C up to 2015 and now again the APNU+AFC which has been in charge for three years.

While power availability increased enormously under the PPP/C it came at a significant financial cost and without sufficient attention to the transmission and distribution system, the bane of the power company over the years.

GPL’s recent testimony before the Public Utilities Commission (PUC) about the number of total shutdowns last year (25) and its poor performance as it relates to frequency and duration of outages was disturbing. The company set a target for 2017 of 75 for the System Average Interruption Frequency Index (SAIFI), which is the average number of interruptions that a customer would experience. However, it reported the SAIFI at 128 for 2017, an increase over the 2016 figure which was 118.6.

For the System Average Interruption Duration Index (SAIDI), which is the average outage duration for each customer served, the power company had set a target of 85 hours, but reported the SAIDI at 133 hours, an increase from 2016’s figure of 125.8 hours.

Though no figures were made available, it does not appear as if line and commercial losses have been restrained to their targets which were to be achieved years ago.

Mr Gordon at his introduction to the media underlined the brittleness of the system.

“The biggest challenge now is keeping the lights on…so the first priority is to keep the lights on because the simplest of events on the distribution line…shuts the system down. Right now there are serious deficiencies in the system that we know need a certain amount of investment…”

He then went on to state that US$110m is urgently needed for critical upgrades of the system. Mr Gordon may well have his finger on the pulse of GPL in the short period he has been here. However, the battle-weary public will be greatly sceptical that US$110m and a solemn promise will fix the problems of GPL.

As has been stated umpteen times in these columns, GEC, going all the way back to the 1970s, and GPL have sucked up several times over the figure cited by Mr Gordon in loans and other types of financing but these initiatives, some involving reputable institutions like the IDB have miserably failed to achieve the desired results. The country is in the midst of another such programme, the multi-agency funded Power Utility Upgrade Programme (PUUP) which has also come with lofty promises.

Prior to the PUUP, a significant loan with financing costs had been received from China for the installation of new power sub stations which were to greatly aid stability in the transmission and distribution system. This has however failed to have discernible impact as the fluctuations and disruptions in the power system have continued unabated.

It was disheartening to hear Mr Gordon lament that a basic underpinning of the system – the configuration for the supply of power is flawed. Some of the US$110M will be used to reroute and correct the current system where distribution lines that take power to buildings are connected directly to the company’s generator. “That’s not how you configure a power system,” Mr Gordon said as he stated that the power should be generated and sent to high voltage lines of sub-stations for the voltage to be broken down before being distributed to the customers.

“In that way, the generator is shielded from events that may happen on the distribution lines that run along the road so right now that’s not the case with a number of sub-stations”, he said.

If the fundamentals in the system have not been addressed by now and the power supply remains so unsteady what assurance does the public have that further expenditure of US$110m will make a difference?

With the Finnish company, Wartsila no longer managing generators for GPL there will be ongoing questions about the performance of the local company, Power Producers and Distributors Inc. GPL’s  presentation before the PUC did not inspire confidence about the condition and maintenance of its generators at the Kingston station.

While Mr Gordon’s suggestions might be eminently sensible, before a commitment is given by the government for further substantial financing for GPL there should be an audit of all the programmes which had been embarked upon by GPL/GEC to rectify the power supply and distribution system. This audit should look at the soundness of the engineering of the present power supply system and the intended objectives of all the major projects pursued over the decades, whether their outcomes were met and whether these contributed to a properly functioning and fully integrated power system.

Too much  expensive financing has been frittered away on GPL. That should not happen again.

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