For the year 2016, the Guyana Power and Light (GPL) again failed to meet pivotal benchmarks including those pertaining to overall systems losses and the number of blackouts and their duration. The acknowledgements of these failings came at a hearing convened in March by the Public Utilities Commission (PUC),
The key standard which has bedevilled the utility for many years is the overall systems losses. This is divided into technical and commercial losses, the former describing the bleeding of power from decrepit transmission and distribution infrastructure and the latter encompassing areas such as theft and tampering with meters. For 2016, GPL had set itself a target of limiting losses to 28.6% of dispatched power and it ended up with a figure of 29.2%. This was a costly miss as the PUC pointed out that each percentage point is equivalent to $200m and so therefore the loss to the utility from the failure to meet the benchmark was $120m.
Of even greater interest to the average consumer was the number and intensity of blackouts delivered by GPL. In relation to blackouts, under the System Average Interruption Frequency Index, GPL had committed itself to delivering no more than 75 blackouts during the year to households. Its actual result was 118 blackouts. This would mean that citizens on the average sustained 43 more blackouts over the year and for some, many more as GPL would have had better power supply in particular areas.
There can be no understating the tremendous psychological and actual burden of blackouts. They transmit to battle-weary Guyanese that there is no relief yet from the decades-old trauma of load shedding and despite years and years of promises, underpinned by huge international loans, successive governments and their managers at GPL have failed to deliver.
In relation to the System Average Interruption Duration Index, GPL committed to a benchmark of 90 hours of blackouts for each consumer for 2016. The actual result was a whopping 125.8 hours. It means that on average each consumer endured 35.8 hours more of blackouts during the year than GPL had promised.
GPL adduced the cut of its subsea cable that transferred power between the West Demerara and Georgetown as one of the reasons for the blackouts and their duration. Commenting on the failure to meet these two benchmarks, the PUC in its Order following the hearing said: “The performance of the company with respect to both indices deteriorated significantly when compared to the previous year. This no doubt would have been distressing to consumers. In reviewing the performance of this standard the Commission considered whether the failure of the cable to deliver electricity from the Vreed-en-Hoop power station constituted a force majeure and whether redundancy should have been in place for such eventualities. We feel that the latter, though ideal, may have been too costly to the company at this time. We do, however, wish to place on record our disapproval of the time taken by the company to have the cable fully functional.”
Failure to meet these three of the eight benchmarks in its Operating Standards and Performance Targets (OSPT) was sufficient reason for the PUC to sanction GPL. Under the PUC Act, the PUC is empowered to sanction GPL and apply penalties of as much as 25% of the total value of dividends payable to the company’s shareholders which in this case is the government. Considering its failure to meet vital benchmarks over the years since the OSPT has been in force, the PUC had good grounds to apply the financial penalty this year. Besieged consumers would have welcomed the application of the penalty in the form of rebates on bills which now attract the 14% VAT.
The PUC differed. “Given the weight that should be attached to (the losses) standard an under par performance casts a shadow on the overall performance of the OSPT. Having regard to all we have heard and noted and taking into consideration the explanations offered by the officials of GPL we do not think it appropriate at this time to make any award of monetary penalty on the Company,” the PUC decision said.
GPL remains a very troubled organisation. During the PUC hearing it admitted that its Loss Reduction Division had been shuttered in 2016 for around three months to facilitate an investigation and that a shortage of meters to complement the work of the Division had also been a problem.
The PUC was scathing in its evaluation of the GPL response. “(This) statement by GPL at the hearing casts a damning indictment on the employees of the company. When an admission is made that workers have to be monitored, condign actions should have been taken to have them not only disciplined but dismissed from the service.
“We are yet to be convinced that the closure of the loss reduction department is the main reason for the target not being met. The reason for the failure may have more to do with the inability of the company to commence its metering programme envisaged in its 2016 to 2020 Development and Expansion Pro-gramme. The metering of consumers as planned in the D & E Programme should in theory significantly reduce commercial losses and by extension reduce the overall percentage of system losses”, the PUC said.
The 2016 evaluation by the PUC of GPL’s performance is significant. It represents the first full year under the APNU+AFC government and it showed how little has changed in relation to the prominent and longstanding concerns such as blackouts. The public had been promised that by the end of 2016 there would be greater stability in GPL’s service. This was not to be and the first quarter of 2017 saw a marked deterioration of service.
This prompted the Minister of Public Infrastructure, David Patterson to acknowledge in March via the Government Information Agency that GPL “has difficulty with protecting its distribution system, and this is responsible for the poor delivery of electricity…we have enough generators working and power provided, but what happened is that we have a problem with the distribution of that power, and that is one of the issues we have to address with Lot A of the Power Utility Upgrade Programme (PUUP).”
The IDB/EU-funded PUUP’s progress will be watched with great interest this year. Consumers are fed up with the interruptions in their daily lives and the poor quality of service from GPL. Furthermore, investors, Exxon aside, would be deterred from considering Guyana as an investment destination when service is so patchy.