Power company appeals PUC $1.3B compensation decision
By Gitanjali Singh
August 3, 2002
The power company is appealing the Public Utilities Commission (PUC) order that it pay $1.3 billion in compensation to consumers at a rate of $4.70 per kilowatt hour from October 1st and to bring down commercial and technical losses to 24% in six months.
The notice of appeal was filed on Wednesday at the Guyana Court of Appeal and was served yesterday on the PUC and the Guyana Consumers Association as well as the Consumers Advisory Bureau.
In the appeal, Guyana Power and Light (GPL) complains against the entire order by the PUC which sought to compensate consumers for what the commission termed inefficiencies in GPL's service to consumers. GPL said that the award of compensation was based on wrong principles and the quantum is excessive and unsupportable by the evidence.
The PUC, stating that it was dissatisfied with GPL's best efforts to reduce technical and line losses had ordered that the $4.70 per kilowatt hour be credited to consumer's accounts each month and further stipulates that the company file a statement with the commission at the end of each month showing the total amount credited and paid over to consumers.
Further, the order is for the company to submit to the PUC at the end of each quarter the status as it relates to reducing technical and commercial losses. When GPL took over the power company's operations, the commercial and technical losses were recorded at 40% and the company undertook to reduce these to 34% in 2000, 29% in 2001, 24% in 2002 and 20% in 2003. However, the firm admitted to the PUC that the losses exceeded the target by 9.3% at the end of 2001 whereas the audited accounts showed that the losses were over by 13% in 2001. The PUC in its order noted that the losses did not affect the firm as full generation was billed into the tariff setting mechanism and this gave no incentive to the firm to aggressively pursue reducing the losses.
However, the power company GPL via senior counsel Keith Massiah is asking the Court of Appeal to declare the decision of the PUC as void as on the day of the order (July 23rd) the commission was improperly constituted. The terms of two members of the commission had expired on June 30th but Prime Minister Sam Hinds had extended their term for another month.
The company is also claiming that the PUC acted without jurisdiction in awarding compensation as only a competent court can do so for breach of the investment agreement on application by a party to that pact.
The PUC on its own motion investigated GPL's maintenance of its property and equipment and the impact of this on service to consumers and found GPL to be in breach of Section 25 of the PUC Act which stipulates that the property and equipment have to be maintained in such condition as to provide safe, adequate, efficient, reasonable and non-discriminatory service to consumers. GPL was a party to the public hearing into that matter.
However, in the notice of appeal, the firm says that the PUC misconstrued Section 25 of the PUC Act by adopting a construction of the word "service" to mean generating and the distribution system of GPL which cannot be sustained. Further, the company argues that the body erred in making an order for compensation without any complaint by a consumer.
The company also feels that the PUC erred and exceeded its jurisdiction by drawing an erroneous construction of the "best efforts" of GPL to reduce the losses and in its finding that the firm has not provided an efficient service to consumer.
GPL argues that the order is unlawful and is substantially a disguised adjustment of rates by the PUC which it has no authority to make. Eighteen grounds of appeal were listed by GPL in the filing.
The company is asking the court to reverse or set aside the PUC order and to award costs.