Electricity rate hike can spark unrest; public hearings needed- AFC

Last Updated on Saturday, 26 December 2015, 21:01 by GxMedia

The Alliance For Change (AFC), warning that the proposed 26.7 percent increase in electricity tariff will spark widespread unrest, strongly recommended a public hearing by the utilities watchdog.

“The AFC would like to warn the PPP Government, that this highly ill-advised and unjustified act on the part of GPL, will be provoking huge national unrest,” the party said in a statement.

The party stayed clear of saying whether it would support the restoration of GUY$5.2 billion that the combined opposition has cut from the 2013 National Budget.

The AFC also demanded that the PUC investigate fully GPL’s call for this rate hike and hear other stakeholders interested in the matter before it orders or ratifies any increases by GPL.

“Electricity increases by GPL are a matter which comes under the jurisdiction of the PUC, and this regulatory body must not exhibit itself as a tooth poodle,” the party added.

The power company at the weekend cited the need for a 26.7 percent increase in tariffs mainly because of the budget cut, rising fuel prices and the need to finance capital projects.

The AFC called on Guyanese to “vigorously” resist the proposed hike, charging that for more than 20 years government has “consistently failed to provide reliable electricity to this nation.”

GPL was flayed by the AFC for spending millions of dollars on new generating capacity while doing little to tap into renewable sources of energy such as hydro, wind and solar.

“The Guyanese people continue to suffer hourly blackouts with repeated adverse effects on homeowners’ appliances and goods, business-owners’ production equipment and school children’s education,” the AFC added.

The AFC, which holds a crucial seven seats in the National Assembly, wants the entire Board of Directors, including its Chairman, Winston Brassington, replaced with competent and independent professionals because the current team was yet to devise a turn around plan after so many years in office.

GPL last increased tariffs in 2008, over 5 years ago.

The computed increase in tariffs as stated in the 2013 FRC is based on a deficit of $5.2 B, and a headline tariff or service tariff increase of 26.7%, that is computed to recover the deficit over an 8 month period (May-Dec, 2013). GPL’s has published its 2013 FRC, its 2012 audited accounts, and other information on its website: www.gplinc.com.

GPL’s fuel cost has risen from a weighted average of US$ 64 /barrel in 2006, to US$108, in 2012; in 2006, GPL’s fuel bill was $12.4 B; in 2012, this had doubled to $24.2 B; in 2012, fuel alone accounted for 83% of GPL’s tariff revenue.

Reacting, the PPP on Monday blamed AFC and A Partnership for National Unity (APNU) for the impending tariff increase because those two opposition parties had engineered the budget cut.

“This was despite several pleas by Government, the Management of GPL, other stakeholders and the People’s Progressive Party for the AFC and APNU to refrain from cutting GPL’s subsidy but they ignored this and went ahead; fully aware of the consequences it would have on consumers,” said the PPP at a news conference.

The PPP stopped short of accusing the AFC and APNU of denying customers on the coastland cheaper electricity through subsidies while supporting the subsidy for Region 10. That region voted overwhelmingly for APNU in the November 2011 polls.

“What continues to boggle the mind is that while the AFC and APNU are putting up all manner of excuses to deny consumers along the Coast the benefit of such subsidies from Government; they did not display this level of concern when they approved the subsidies Government had also set aside for Region 10 to the tune of close to 3 billion dollars,” added the PPP.