Electricity rates higher than Barbados, St. Lucia
Stabroek News
April 11, 2002

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Dear Editor,

Barbados : US$0.1399/KWh
St Lucia : US$0.1728/KWh
Guyana : US$0.1753/KWh
Guyana +15% : US$0.2016/KWh

The above figures show that at year end 2001, the cost of electricity to the Domestic Consumer in Guyana

was only marginally higher than his counterpart in St Lucia but 25% higher than it is in Barbados without the proposed 15% tariff increase in Guyana. The imposition of the proposed 15% will result in the differential increasing to 17% vis--vis St. Lucia and to 44% vis--vis Barbados. (Additionally, in Barbados there is a small rebate for the prompt settlement of accounts.) These differentials mean that the cost of electricity as a percentage of the household budget in Barbados and St. Lucia is smaller than in Guyana, so that more money is available for other things e.g food, clothing, housing, entertainment, etc.

The pressure on the Guyana consumer is even greater then the figures above indicate. This is so because both the St. Lucia and Barbados consumer enjoy higher standards of living, higher levels of disposable income, and a more efficient and reliable electricity service. Most certainly, this pressure on the Guyana consumer will increase as GPL's inefficiency, and consequential high costs, drive more and more large commercial and industrial consumers to "own-generation". To remain competitive, these consumer groups must function independently of GPL's services. Even now, without the imposition of the 15% increase, members of these groups report that their electricity costs from own-generation is less than they would have been using GPL's supply. Such own-generation is an additional cost to the economy (to "We the People of Guyana") because of the loss of what the economists call "economies of scale", i.e. with a given level of installed capacity, the unit cost of production rises as the number of units produced declines. As the large consumers disconnect, more and more of the burden that is GPL, will have to be borne by the domestic consumer. The issue here is not simply the 15% tariff increase, but the operational viability of GPL as a functioning entity, and the consequent availability of electricity tot he public as an essential service.

Yours faithfully,

C. F. GRANGER