Dear Editor,
The Guyana Power and Light’s (GPL) forecast of an $11 billion deficit that will warrant almost a 20% increase to consumers (SN, Feb 8) is a colossal disaster that should not be allowed to happen.
Using rising fuel prices as the basis for the projections, the company thinks that it has secured the right to pass the deficit load to the consumers.
What consumers of electricity in Guyana do not know is that they are already paying double the cost for the electricity they consume.
This is so because more than fifty per cent of the electricity generated is lost through slack connections, broken cables, faulty transmission lines and theft. However, consumers are saddled with paying the cost for the total amount of power generated and distributed, even though half of it is lost.
A simple story will aid in understanding what GPL has been doing for years. Consider a bucket of water that amounts to 50 cups and is valued at $50.00 and you want to sell the water to 50 people at the same price. Each person must pay $1 dollar so that you cover the cost. Simple.
Now, consider the same bucket with the same amount of water. However, before sale, 25 cups of the water are lost through a hole in the bucket and spillage but you want to sell the water to 50 people and get $50.00. Because the water now measures only 25 cups, the fifty people must pay $2.00.
Similarly, consumers are paying for all the power GPL loses. It means that if your electricity bill is $10,000 monthly, you should really be paying just about $5,000. If it is $70, 000 you should be paying about $35,000, and if it is $500,000, you should be paying $250,000. This stark reality is having a domino effect on the economy and the ordinary Guyanese people are carrying the load. They wonder why ends cannot meet but they are not conscious of the burden.
When the productive sector pays double what it should be paying for power, one of the essential factors of production, costs of the product manufactured double and the price increases. Wholesalers then buy at the high price, put on their mark up, then, middle men do the same before the goods are put on the shelves for consumers, who have little choice, but to pay what is on the tag.
Studies conducted on the power sector and one for the Rural Electrification Programme have identified and quantified the loss. GPL’s management is aware of the percentage of power lost in the national grid. They know that their consumers are paying for the loss. They are conscious that people are paying for what they are not consuming.
Head of the Presidential Secretariat, Dr Roger Luncheon, disclosed that the government plans to intervene to avoid a tariff hike. While an immediate plaster must be applied, the real intervention should be strategic. There should be a comprehensive plan to deal with faulty transmission lines, slack connections and broken cables in order to avert future increases.
Yours faithfully,
Lennox Cornette
