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GPL to pass down benefits to consumers
By Fareeza Haniff
With a number of capital projects currently on stream by the Guyana Power and Light Company (GPL) which will eventually allow the power company to save on fuel cost, the benefits are expected to be passed onto customers in the form of a reduction in electricity rates.
GPL’s Chairman: Winston Brassington
This is according to Chairman of GPL, Winston Brassington, who did not want to predict what the price for fuel will be next year, but was in a position to note that the three capital projects will allow the power company to save on its fuel costs in addition to providing improved reliability of generation.
“So let us say that the savings that we will get here augers well for the company and at some point in time, provided fuel prices don’t move up, we expect to be able to pass them on to the consumers,” Brassington said.
The GPL chairman explained that heavy fuel oil is cheaper than crude, which is cheaper than diesel; and due to this, GPL could be dealing with completely different prices.
Over the years, fuel prices have increased, but it reduced tremendously towards the end of last year.
As a result of the increased fuel prices, GPL has been losing billions of dollars. In 2008, the company lost $1.5 B after tax.
However, this year, the company should do better and not lose any money, Brassington said.
It was explained that at this point in time, GPL does not expect fuel prices to rise and possibly, it may reduce.
“We expect to have savings from the heavy fuel oil…and I don’t expect prices to go up and I think at the end of the year, we will review our position. But I don’t want to make more commitments on that because if fuel prices were to suddenly go back up to the level they were last year, we would be back to a completely different position.”
The Guyana Government in 2008 agreed to fund over US$30M in capital projects to improve generation capacity in Demerara and Berbice.
In this regard, Brassington said that all of the projects are currently on stream.
Another capital project in the pipeline is a US$30M contract to rebuild transmission network from Parika to Berbice.
The contract has already been determined and within a few weeks, a Chinese team will be in Guyana to negotiate the details. It was explained that this contract will see the expenditure of about US$34 M to rebuild substations, and establish new ones along with rebuilding transmission lines.
“Combined with these capital projects, we should see now and in the next few years a significant improvement in the reliability of our generation and transmission systems.”
According to the GPL Chairman, many transmission lines are usually overloaded, and this is the situation currently being experienced on the West Coast of Demerara.
Another source of new power for GPL is Skeldon Plant, which has10 megawatts of heavy fuel oil generators.
Brassington explained that GPL has not been able to take all of the power from that plant because they are limited by the transmission lines between Skeldon and Number 53.
To rectify the situation, GPL commissioned the construction of a new 69 KB line from Skeldon to Number 53 in 2008.
It is scheduled for completion this month end and according to the Chairman, the line will allow GPL to take as much of the power available at Skeldon down to New Amsterdam.
GPL also has another project in Berbice, which deals with the upgrading of canfields and the conversion of it into heavy fuel oil.
Meanwhile, within the Demerara system, it was noted that the new plant will work on heavy fuel oil and will allow GPL to displace most of the caterpillar and other diesel sets.
When these three projects are finished this year, 95 per cent of the fuel will be heavy fuel oil, which is generally cheaper.
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