Dear Editor,
This letter is in response to the letter captioned `GPL has a rolling five-year Development and Expansion Programme’ which was published by Stabroek News on September 12, 2009. This letter by GPL management in response to the criticisms of its poor service is additional justification of the need for fundamental change in Guyana, including at the GPL.
One would have thought first that in the letter there would have been some explicit link made between the GPL and a low carbon development strategy for Guyana.
The letter refers to the large investment needed in Guyana’s power generation and distribution sector, and how this could impact Guyana’s sovereign debt. As noted in the letter:
“The most difficult issue to negotiate with any investor is payment security. When you consider Guyana’s credit rating and our country risk, negotiating acceptable security that does not add to the national debt is very difficult. You really have to be involved in these negotiations to appreciate the degree of difficulty.”
The link being made between large investments in Guyana’s power generation and distribution sector and Guyana’s debt is not automatic. It is only automatic for those in the PPP government who do not understand the pivotal role that the non-criminal private sector can play in Guyana’s development. Guyana’s electricity production and distribution sector represents a great investment opportunity for private sector funding, in the right investment climate. Thus the real challenge is to change how we look at the electricity sector in Guyana, including the ownership structures and the regulatory framework.
In the letter it was also noted that:
“In countries where net metering is employed the consumers are paid many times more the cost per kWh supplied to the grid than they would pay for a kWh supplied by the grid. The government typically pays the utility the difference.”
This may happen in some jurisdictions, but in Jamaica, West Indies, and in New York, and elsewhere this is not so. In fact in most jurisdictions with net metering consumers are paid less than the prices at which they buy power from the grid, as much as 75% less in some cases. In some countries in Europe (Germany for example) utilities have to pay higher prices which encourages consumers to invest in renewable energy. Thus in Guyana pricing for net metering can be worked out based on our circumstances. We have to decide how much we want to subsidize household investment in renewable energy, as against investment in renewable energy by the major electricity supplier/suppliers, and when we decide on subsidies we also have to decide who pays: the government or the private sector. This is where the impact on government debt does really come into play.
Yours faithfully,
Gerry Yaw
New York
