From the start of next month, Lindeners will begin paying higher electricity rates, in keeping with the plan by government to gradually scale-back its subsidising of the cost in the mining town.
“On July 1, the revised electricity tariffs will kick in,” Head of the Presidential Secretariat Dr. Roger Luncheon told a post-Cabinet press brief yesterday.
Luncheon noted that this year’s budget makes a provision of $1.8 billion for the 2012 electricity subsidy in Linden—a reduction of about $1 billion in the actual subsidy provided last year.
“The cut of $1 billion in the subsidy logically will lead to increase in tariffs in Linden,” he said, while noting that during the early days of the policy debates of the budget the government had unveiled a model for the increase of the tariffs. He, however, said it was a model that was “hammered out” and reneged on by main opposition APNU.
The announcement by Minister of Finance Dr Ashni Singh at the reading of the National Budget in April that the electricity tariff will be increased had been met with much resistance from Lindeners, who took to the streets in protest.
Opposition parties APNU and the AFC criticised the move to increase, with the former calling on the government to implement a series of relief measures for the mining town before raising electricity tariffs. APNU had initially struck an agreement with the government for a series of measures which Prime Minister Sam Hinds had told Parliament would allow the tariff increase to proceed as planned. This sparked uproar at Linden and APNU was left to do damage control in the mining town and to state that it had given no such blessing to the tariff hike.
Hinds, who has ministerial responsibility for energy and electricity, had said in an open letter that the government was running out of money to subsidise electricity in Linden, where the price of power paid by households is less than 10% of cost.
Hinds, in the letter, said “Central government is now afraid that this year’s allocated budget could run out by October or November. From then households will receive no electricity or must pay the full price.”
He added that “Central government has been paying the total costs of generating the electricity distributed in the town of Linden as well as providing from time to time additional support in various ways to meet the needs of transmission, distribution and extension of electrification.”
But this situation is not sustainable in the long term, the prime minister had declared.
Since the 1980s, Hinds observed, the then central government decided that a way had to be found so electricity prices in Linden could gradually reach sustainable, economic levels, in order that “any quantity of electricity desired by any customer would be available without any question of whether the budget support may be exceeded and avoid any consideration of rationing electricity.”
Since 2000, there have been steady, large increases in the price of fuel, coupled with steady growth of the Linden area. Consequently, there have been large increases in the unit cost of electricity and in the total quantity of electricity to be supported, Hinds pointed out.
According to Hinds, in Linden there appears to be significant opportunity to reduce electricity consumption. He added that the average monthly household consumption last year on the Linden grid was 320 kWh, while on the Guyana Power and Light grid it was 150 kWh.
