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Lethem businesses reject electricity rates increase
– say 100% hike will cause prices of goods to go up
The business community of Lethem, an area that borders with neighbouring Brazil in Region Nine, has rejected an electricity tariff increase announced last Friday by Prime Minister Samuel Hinds. The hike took effect from Tuesday, July 1.
The state-owned Lethem Power Company
“The Rupununi Chamber of Commerce and Industry (RCCI) executives and members of the business community are very disturbed, and peeved about the decision taken to increase the electricity rates without proper consultation with its members.”
In a statement yesterday, the RCCI said the Prime Minister held a meeting on the rates hike last Friday at the Arapaima Primary School where about 35 residents were present, and not hundreds, as was reported by another newspaper.
The business body denied that the increase was agreed to by residents, as was reported on Sunday.
In February, the Power Company and Chamber had accepted and agreed to electricity rate as follows: First 15 kilowatt (KWH) hours of electricity will remain free for residential and commercial consumers.
“For residential consumers, from 16- 45 KWH, the rate will be $55 per KWH, and from 46 KWH and above, the cost will be $60 per KWH. It was agreed that for commercial consumers, from 16 to 100 kwh, the rate will be $55 per KWH, from 101 to 200 kwh, $60 per kwh, from 201 to 400KWH, $70 per KWH, and for over 400 units consumed, $75 per KWH.”
The chamber insisted that even if the new rates were effective in February, the reality is that the power company has not been supplying a reliable service. This was even though the company had acquired two new generators.
“Additionally, the consumers both residents and commercial were finding it difficult to cope with the rates agreed upon in February. On July 1st, the Power Company in an effort to recover monies for electricity consumed from consumers, revealed that there were in excess of 300 consumers who were unable to pay their May month bills on time; a total value of approximately $10M. The Chamber is of the view that with this new increase many consumers will be unable to meet that demand.”
The new rates effective from July 1st are first 15 kilowatt of electricity free; $60 per kilowatt for electricity consumed from 16 to 50 kw, and $100 per KWH for any unit above 50kw.
“The Chamber has found this to be very harsh compared to the rates agreed upon last February, and the Chamber is therefore questioning why such an increase without proper consultation with consumers. It is therefore, calling on the Power Company to review this rate immediately, and ask that the previous rate be continued until a workable solution could be reached.”
The Chamber urged Government to increase its subsidy to the power company so that consumers can be cushioned.
“Should this increase stand, then there will be no alternative but to increase prices of commodities and services that are being provided by various businesses. From February to now the price of electricity has gone up by 100%. For businesses to survive, they will have to increase their prices by a similar margin. Some are contemplating closing while others are thinking to move their businesses to neighbouring Brazilian town of Bon Fim, where electricity costs are much lower than Lethem.”
The RCCI said that it is fully aware that the power company is experiencing its fair share of financial difficulties.
“The Government must support the development of Lethem and the Rupununi region by increasing its financial and other support to its agencies. The private sector has invested an estimated $4B over the last eight years and has created jobs for hundreds of Amerindian residents who stand to go on the breadline if these new electricity rates are not rescinded. The Chamber is calling on President Ramotar and his Cabinet to intervene in what can escalate into a crisis situation if not resolved amicably.”
At a meeting with its members Wednesday evening, businesses also voiced their concerns about the continued deplorable state of the Lethem to Linden road, and “viewed this as a great hindrance to development of the border town, thus bringing additional hardships to the rapidly growing population of the Rupununi.”
The Chamber noted that since the Moco Moco Hydro-power station collapsed some eleven years ago, several efforts were made by the Chamber to have the facilities rehabilitated.
“The RCCI is once again calling on government to give consideration towards harnessing the Moco Moco hydro and any other suitable potentials of alternative energy.”
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