GPL mulls upping light bill

Mar 09, 2022 News

---

Kaieteur News – The Guyana Power and Light Incorporated (GPL) is mulling an increase in light bill charges, as fuel prices have reached US$140 per barrel, thus driving up the company’s operating expense to a whopping $4.5 billion monthly, while electricity sales merely account for $3 billion.
Chief Executive Officer (CEO) for the electricity company, Mr. Bharat Dindyal during an exclusive interview with this publication on Tuesday, told this newspaper that while this increase is not presently being reflected on customers’ bills, it may very well be an option if the electricity consumption is not reduced.

In a statement on Tuesday, GPL said that the events unfolding in Europe, particularly due to the Russian invasion of Ukraine, has impacted the fuel costs, which are likely to further increase.
“GPL’s landed cost for fuel today is approximately US$140 per barrel and has quadrupled from 2016 when the fuel price was approximately US$30 per barrel… GPL currently utilises approximately 3,700 barrels of fuel daily for electricity generation to meet the daily demand, at the cost of approximately $111.5 million. This increase has moved GPL’s total monthly operating expenses to approximately four and one half (4.5) billion against monthly electricity sales of approximately three (3) billion dollars,” the power company explained.
It added that this development means that GPL has to utilise every dollar it collects to meet its operating expenditure and the financially challenging position cannot be sustained at current fuel prices.
Dindyal explained that customers must therefore reduce their electricity consumption as this would also trim down the company’s fuel costs and operating expenses by extension.
GPL explained, “Every kilowatt-hour of electricity not generated would reduce the company’s fuel costs and by extension the overall operating costs. Given this extremely challenging and unsustainable position, the company is imploring all customers to practice energy conservation, as we work together to manage the company’s expenses during this extremely difficult period.”
The GPL head pointed out that while a tariff increase is not off the cards just yet, the electricity company would have to seek permission first from the Power Utilities Commission (PUC).
He said, “If we were to do that (increase the cost of electricity), we would have to go through the PUC and we haven’t gone to the PUC… we want our customers to appreciate that we are in serious trouble and one of the things [that] they can do to help us is to conserve because every bit of electricity that we don’t generate will reduce the burden of the expense on us…the first thing that we are going to do is ask customers to reduce their consumption and then we’ll see what the response is.”
This year, government allocated 29.4 billion to the energy sector. Major allocations within this amount include: $20.8 for the Gas-to-Energy project and $1.4 billion for the 33 MWs solar farms for Berbice, Essequibo, and Linden.
Other allocations include over $600M for the construction of a 1.5 MW hydropower plant at Kumu, and for rehabilitation and upgrade to 700kW capacity of the defunct Moco Moco hydropower plant in Region Nine.
Additionally, over $170 million has been budgeted for the completion of the 150kW hydropower scheme at Kato and for 30,000 photovoltaic home systems for hinterland and riverain areas.
Likewise, $1.1 billion is budgeted for solar farm interventions in 2022. These include the completion of the 1.5 MW solar farm at Bartica, 0.75 MW at Wakenaam and the 1.0 MW at Lethem.
Over $450 million has been budgeted to expand and upgrade the hinterland electrification and power generation capacity through the purchase of generators and the expansion of distribution lines.
In 2022, $1.6 billion is budgeted for the construction of a parallel transmission line linking the Kingston and the New Sophia substations, the upgrade of the existing L5 transmission line, and other works aimed at reducing transmission losses and maintaining desired system voltage levels.
Some $2 billion was allocated in Budget 2021, to pay for electricity charges to GPL but by year-end, government was seeking an additional $4 billion from the Contingency Fund to clear arrears owed to that company by State agencies.
The request came just a week after GPL announced that it was broke. The then Opposition Leader, Joseph Harmon during a press briefing flagged the request, citing that the amount is a 329 percent increase from what was paid to the company in 2019.
He said, “Additionally, $4 billion is being requested to clear the arrears owed to GPL by the government ministries. The Ministry of Finance budgeted $2 billion for electricity charges in 2021. Now this is a 329 percent increase, from what was budgeted for in 2019.”

---

---