Commission grants GT&T temporary rate hikes By Wendella Davidson
Guyana Chronicle
February 20, 2002

THE watchdog Public Utilities Commission (PUC) yesterday announced temporary rate increases retroactive to midnight January 31 this year for the Guyana Telephone and Telephone Company, based on an application filed on December 31, 2001.

The temporary rates will enable the telephone company to "recoup whatever revenue it expects to lose as a result of the reduction of the international settlement rates," and will remain "in force until a final decision is made or unless it is modified or terminated", the commission noted in an order.

As a consequence, a previous order by the commission suspending the steep rates filed and proposed by GT&T in Tariff Notice 1/2001, has been terminated.

The temporary rates order specifies that from midnight January 31, there shall be two periods - `Peak' and `Off Peak' for international and local telephone calls.

The `Peak' period will be from 0600 hrs to 1800 hrs, Mondays to Fridays and the `Off Peak' from 1800 hrs (6 p.m.) to 0600hrs (6 a.m.) Mondays to Fridays, all day Saturdays, Sundays and public holidays. There will, however, be no Second Off-Peak Period.

With the exception of the United States and the United Kingdom the current `Peak' rates remain the same, while the `Off Peak' rates will be those currently charged for the `First Off Peak' period.

** The new temporary charges for the U.S. and UK will be $100 and $136, respectively, as `Peak' Rates, and $90 and $123 as `Off-Peak' Rates.

** Intra-exchange calls made locally will now cost 60 cents per minute during the `Peak' period and 30 cents per minute during `Off-Peak'.

** Inter-exchange calls made without the assistance of an operator between 0600 hrs and 1800 hrs will now cost $3, $4, and $7 per minute, as against a previous charge of $2.64; $3.96; $6.60, while customers making calls between 1800 hrs and 0600 hrs will pay $2; $3; and $5 as against a previous rate of $1.66; $2.64 and $4.40.

** Line Rentals - there will be a $500 charge on Residential Main Line for the first and second line. Customers wanting a third or subsequent line will pay a monthly rental of $750.

** Those with Business Main Lines will now pay $1,500 for four lines.

According to the PUC order, all other charges/rates for services which have not been mentioned will remain in force.

The commission pointed out that its decision on the appropriate level of revenue to award GT&T, was based on its conclusions of the test year ending December 2002, as proposed by the telephone company. It added that while it accepts the use of the test year (December 2002) as reasonable, it nevertheless reserves its judgement on the forecasts until further investigations to fix permanent rates.

It said too that there will be a review of the actual results for 2002 to verify by some measure the accuracy of the forecasts.

Also, for the purposes of the temporary rates, it (PUC) has largely accepted GT&T's forecast for revenues and expenses.

At a hearing last month when the PUC suspended the GT&T proposed rates, company employees who had attended the forum in numbers, had contended that many of them stood to lose their jobs if the increases were not granted.

In the order granted yesterday, the PUC noted, however, that "the recommended rate increase included all the labour and capital costs in that budget. Therefore, any reductions in the budgeted and capital costs would require immediate corresponding downward adjustments to temporary rates."

The PUC says it will investigate a situation whereby "only recently a copy of the 2002 budget was received and it is noted that many of the revenue and expense line items do not tie to the version of the budget that was filed with the Commission".

"This will be investigated further, but it is of note that if the budget provided to us is the appropriate budget to be used in this filing, GT&T's alleged deficiency would be less than originally filed."

The commission said "further testing of the budget projections will be a requirement before setting of the permanent rates."

It said too it has accepted GT&T's proposal concerning deferring of its (PUC) consideration of the appropriate level of advisory fees, and that the computation of the company's working capital and assets revaluation to be used in the determination of revenue requirement has been changed.

GT&T is entitled to a 15 per cent rate of return on its capital, as specified in Section 33 (a) of the PUC Act, but it has contended that it will lose revenue because of the reduction of the international settlement rate order the United States Federal Communication Commission (FCC) made in 1997.

The order mandated that the rates be reduced from US83 cents to US23 cents per minute effective January 1, 2002, to the extent that GT&T will receive US23.cents per minute for calls terminating in Guyana from the U.S. as against a previous US83 cents.

GT&T has to pay to the U.S. carrier 23 cents per minute for calls originating from Guyana and terminating in the U.S.