Electricity rates to rise significantly in January - Hatch By Daniel DaCosta Stabroek News June 1, 2000 Difficult times are ahead for electricity consumers as the New Year is expected to bring with it significant increases in rates. According to Guyana Power and Light Inc (GPL) Chief Executive Officer (CEO) Noel Hatch, "[The] ending of the subsidy to consumers under the quadripartite agreement by year-end would result in significant increases in January." The magnitude of the increases, he said, would depend to a large extent on the price of fuel. Hatch made the disclosure on Tuesday at the GPL's Canefield Power Station during a meeting with representatives of the Berbice and Upper Corentyne Chambers of Commerce. According to Hatch consumers in Guyana pay less for electricity than others in the Caribbean because of the subsidy. "However, things are changing and by year-end consumers will have to pay the economic price for electricity." Earlier the CEO had provided an update of the generation status at Canefield and disclosed that the alternator for the number three unit which was expected back from the United Kingdom in May was now due to arrive by the end of July. The unit has been out of operation for some two years now. At a media briefing earlier this year, Hatch had disclosed that the alternator was expected back in May and would have significantly reduced the outages in the region. However, Hatch said that in March, the manufacturers informed the company that additional parts had to be manufactured. The repaired alternator is now expected to leave the United Kingdom on June 27, and would arrive in Georgetown by the end of July. It will be attached to the number three unit and should be operational by the end of August. The cost of repairing the component, he disclosed, was $55 million. East Berbice is currently being serviced by a 5.5 megawatt generating set (the number four unit) supported by two caterpillar mobile sets at Canefield and another Caterpillar set at Number 53 Village. The caterpillar sets have the capacity to supply about 1.4 megawatts of electricity each. According to the CEO, the peak demand in the region is 11.5 megawatts. Following the re-introduction of the number three unit the number four unit will be pulled out for rehabilitation over a four-week period. Responding to concerns raised by the two chambers, Hatch disclosed that discussions were underway with government on prioritising areas in the region which were without electricity. Hatch explained that it would cost a minimum of 100 households, $50,000 each to obtain electricity in areas through which power passes. Touching on billing and collection, the CEO remarked that the government was the company's largest debtor with some 80 agencies and institutions in arrears for several years including City Hall. GPL, he said, was acting as agent for GEC to collect the arrears. Hatch told the businessmen that by August the company would have spent some $140 million on repairs, upgrading and maintenance of the Canefield plant. Replying to questions raised about plans for additional generation in Berbice, the GPL boss disclosed that a third five-megawatt generator was on the drawing board for Canefield by 2002. "It takes between 18 months to two years between ordering and delivery of such a set." Hatch also disclosed that GPL needed $460 million by next December to cover the cost of spares and maintenance works at Canefield (including the alternator), Garden of Eden and Versailles plants. This money he pointed out had to be raised from local stakeholders, consumers and the government. "If this money is not found by next December problems of supply reliability and continuity will arise in Berbice and Georgetown. It is a serious problem, which must be solved now." According to the power company boss "it must be solved to avoid a near certainty of outages. If the spares are not acquired the risks will progressively rise between now and December when the peak of the system normally occurs. Stating that the utility had been "under-financed and under-managed" over the years, the CEO told the eight businessmen that "to upgrade the utility to reasonable levels and an enhanced supply some US$52 million will be required." He said approaches would be made to international financial institutions and banks to raise this amount. On October 1, the CDC/ESBI consortium is expected to release US$6 million to the utility as part of the agreement. Hatch also disclosed that the company's annual fuel bill was in the vicinity of US$3 million to US$4 million. A recent survey conducted revealed that some 30% of about 400 major customers were involved in irregularities with the majority being in Georgetown. The company also intends to replace some 40,000 old meters at a cost of US$30 each. The Upper Corentyne Chamber of Commerce and Industry was represented by Kumar Dudnath, vice-president; S. Sampat, acting secretary and David Subnauth, an executive member. The five-man team from the Berbice Chamber of Commerce and Development Association was led by vice-president Mohamed Raffik. Hatch was accompanied by Regional Engineer Kenneth Klass and Assistant Public Relations Officer, Arlene Huntley. The CEO had earlier met Regional Chairman Rohit Persaud in New Amsterdam. Follow the goings-on in Guyana in Guyana Today