PUC bill passed after most opposition MPs walk out
By Patrick Denny
July 30, 1999
With the opposition benches empty, save for the two parliamentarians representing The United Force (TUF), the National Assembly last evening approved the Public Utilities Commission (PUC) Bill 1999 which will help pave the way for the privatisation of the power company.
The members of the major opposition party, the PNC, and the Alliance for Guyana had earlier walked out.
Attorney-General and Legal Affairs Minister, Charles Ramson, SC, who piloted the PUC Bill through its second and third readings took responsibility for advising Prime Minister, Sam Hinds, not to share the details of the Guyana Electricity Corporation (GEC) privatisation agreement with the parliamentary opposition.
Ramson, initiating the debate on the Bill, said that it was related to the development of the country and encapsulates all the rules and regulations touching upon and concerning the relations between the public sector and public utilities.
He explained that the rationale for the Bill, which was extensively amended in 1991 and 1994 and in 1997 in anticipation of the aborted SaskPower takeover of the GEC, was to safeguard government's agreements with investors being scuttled by the PUC.
Responding to concerns raised outside Parliament about the legislation, the Attorney-General said that the Bill as circulated was being amended to remove any possibility of a violation of the Constitution given that the agreement in some cases would take precedence over any existing written law.
He referred to Clause 24 of the Bill which he said gave wide- ranging powers to the PUC to initiate and conduct investigations. The Attorney-General said that the legislation, contrary to comments by critics of the Bill, could refuse rate increases to any utility.
He said too that under Clause 35, it could authorise an investigation to determine whether any rate increase was justifiable. Also, he said that the legislation also provides that a public utility has an obligation to provide every consumer with a bill every month or after such period as the PUC would decide.
The Attorney-General argued that legislation augments the autonomy and regulatory capacity of the PUC in such a way that a potential investor was left in no doubt about the prescriptions by which he would be bound.
TUF's Manzoor Nadir, whose view was the only opposition position presented to the Assembly, claimed that the Bill did not increase the capacity of the PUC but in fact enervated it. He also criticised the government for not consulting with the PUC, which he said was most experienced in the regulation of public utilities.
This claim was refuted by former Attorney-General, Bernard De Santos, the only other speaker from the government benches to speak on the Bill. He quoted extensively from a July 13 memorandum from the chairman of the PUC to the Minister of Trade, which he said was the basis of the two-page advertisement by the PUC in the newspapers on July 25 opposing the proposed new bill.
Nadir claimed too that the legislation was based on the recommendations of the two utilities to be regulated by the PUC, contending that instead "we in Guyana should set the law and if an investor does not like it, he should go as others would come."
He argued that the Bill sees the hand of the minister on the handles of the levers, with Clause 7 giving the minister power to set the salaries and conditions of the chairman and members of the PUC. De Santos also refuted this, pointing out that the amendment circulated, which Nadir had received, gave that power to the National Assembly.
Nadir contended too that the present legislation did not provide for the PUC to order that modern, cost-effective technology be used in the provision of the service to consumers.
And expressing concern about the precedence the agreement between government and a public utility would have over existing laws, Nadir pointed out that unlike the present legislation, the PUC would have to deem as approved any development programme provided to it by a public utility once it was in accordance with the agreement with the government. So too was the issue of stocks which could be issued without the approval of the PUC as specified in the agreement.
Nadir also argued that the legislation had dropped the clause in the present Act that required that the operations of a utility should not contribute to the degradation of the environment. However, in winding up the debate, Ramson said that was taken care of by the Environmental Protection Act, which was passed after the present PUC Act.
Nadir also cited an example of the PUC being weakened as the limiting to $25 million the penalty it could impose on a public utility.
De Santos in his presentation pointed out that Nadir had a misconception about the role of a PUC. He explained that the role of a PUC was not to set policy but to balance, in an even-handed way, the interests of the public utility, the consumer and the government, once a contract had been entered into between the utility and the government.
He described the author of the advertisement by the Public Utilities Commission as being myopic, in that he failed to recognise that the bridges he built he would have to cross.
He refuted claims by Nadir that the legislation affected the funding of the PUC, pointing out that what he had omitted to say was that any shortfall arising from the assessments of the utilities by the PUC would be made up by the government.
De Santos stressed that the Bill responds to the Rule of Law and the efficiency of the courts, subject only to a 70-day time constraint.
He stated too that unlike the present legislation, the Bill enhances the autonomy of the PUC by placing some matters in the hands of parliament rather than to ministerial discretion.
He stressed that among the powers given to the PUC, even though it is to be used as a last resort, is the power to close down a recalcitrant public utility for repeated infractions of its order.
At the committee stage Clauses 7, 9, 21, 22, 28, 29, 38, 64 and 65 were altered in accordance with the amendment circulated by the Attorney-General.
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