The Public Utilities Commission must regulate the GPL

Sep 02, 2017 Letters

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Dear Editor,
Public utility regulation is a discipline just like law, engineering economics, sociology etc. Like those other discipline it is taught by universities, specialized school and umbrella regulatory bodies, for example, the National Association of Regulatory Utility Commissioners of the USA (NARUC). Like the other disciplines too certificates from schools do not make one a competent regulator.
To become a competent regulator, the knowledge gained from schooling must be combined with experience working in an effective regulatory environment. I am not sure that Guyana’s PUC provide that kind of environment since it did very little regulation over the years either because it is excluded by law from performing as an effective regulator or it does not have the wherewithal to do so.
The PUC came into being in October 1990. This makes it one of the oldest public utilities regulatory bodies in the English speaking Caribbean. Yet its website does not indicate how it operates. By law and regulatory policy the approach to regulation by the PUC, like every other such body, is supposed to be predictable, transparent, of the highest integrity and responsive to the needs of the stakeholders. The Commission should embrace policies that will ensure that these objectives are achieved.
This means that everyone should be aware of its policies and procedures and how it operates. Apart from holding “hearings” the PUC embraces no other procedure to indicate transparency in its operation. Holding a “hearing” without providing the would-be participants with the information on which the “hearing” will turn cannot represent transparency. Likewise, who decides on which documents are confidential and which are not?
All documents deposited with the Commission are presumed to be public property. If the utility seeks confidentiality of its documents what are the confidentiality criteria? These questions would be answered by the Commission publishing its Rules of Practice and Procedure. Even though the PUC is 27 years old, no such document can be found on its website or anywhere else.
No other regulatory guidelines regarding regulating electricity could be found for example, no integrated resource plan approved by the PUC, no policy on depreciation, instant reporting on blackouts or outages affecting a predetermined number of households, adding capacity to the public supply system, renewable energy interconnection, optimum amount of intermittent energy allowable unto the grid, feed in tariff, depreciation policy for GPL, etc.
Through the systematic emasculation of the PUC through the ESRA, as amended, which removed every scintilla of effective regulation of electricity from the purview of the PUC, and the constant amending and changing of the PUC Act, the Commission has become a “toothless tiger” jumping to the commands of the GPL and the Minister. In essence the PUC does not form part of the electricity sector.
The administration should realize that electricity is a national security issue, that one of the indices foreign investors looks at before making a decision to invest in a country is the cost of electricity in the country, the stability of the electricity supply and the application to connection lead time.
The administration should also realise that whatever was being done for the last forty years did not bring us out of the blackout menace, and that some other solutions should be tried. Is the GPL structured correctly? Should we not be looking at unbundling generation from transmission, distribution and supply and leaving GPL to handle the latter. Should we not take advantage of Section 4 of the ESRA and privatise generation totally?
Was it right to remove Wartsila from the generation scene when the whole of the Caribbean has foreign companies in charge of their generation? What is the impact of the large companies leaving the grid on the rates of those who cannot do so? A proper functioning PUC, staffed for competence, should have been able to answer these questions and advise the administration on the way forward.
Finally, I am of the view that the blackouts we are suffering is as a result of the structure of the electricity sector with GPL at its head. I am further of the view that the PUC must form an effective part of the structure of the sector. For this to be done it must be reverted to the powers it got, relating to electricity, under its 1990 Act. Until the importance of stable and reliable electricity to the country is recognized and steps taken to do things differently, the blackouts will continue.
Lance McCaskey

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