Consumer Association rails against GWI disconnecting citizens, charging reconnection fees

Sep 19, 2022 News

…PUC to host hearing on Wednesday

Kaieteur News – The current reconnection rate is a perplexingly high penal charge for consumers. Not only that but disconnecting one’s access to water breaches human rights regulations according to the United Nations Resolution 64/292.

Guyana Consumers Association (GCA) Consultant, Dr. Yog Mahadeo

These are some of the arguments being put forward to the Public Utilities Commission (PUC) by a consultant of the Guyana Consumers Association (GCA), Dr. Yog Mahadeo.

Mahadeo in a letter dated August 22, 2022 to the PUC argued that the disconnection of water by the Guyana Water Inc (GWI) must not continue, while suggesting that other options be explored to get customers to pay their bills. In fact, he even made suggestions to the agency in this regard.

The PUC, which is mandated to listen to consumer concerns specifically with regard to utility services, is scheduled to host a public hearing on September 21, 2022 on the matter. The session will be held via the zoom platform and members of the public are invited to join from 10:00am. The meeting ID is: 839 2269 6647 and the passcode is: 456518. Mahadeo in his missive reasoned, “A consumer who clears outstanding bills is ready to resume payment for service. Any contemplation of a reconnection cost should be backed by clear and detailed cost breakdowns. There should be a disaggregation of the expenses, identification of opportunity costs, surpluses, and the evaluation of the risks and rewards of disconnection and reconnection that lie solely with and for GWI.”

He went on to explain that a thorough analysis of the cost of disconnection would prove that GWI suffers exponentially from such an event. For instance, he explained that there is physical disconnection cost which is not borne by the consumer. The GWI goes on to incur further losses, the Consultant noted, for the loss of revenue during this period coupled with “the loss of goodwill, and the loss of time in planning and executing a reconnection.”

On the other hand, Mahadeo explained that a penalty is imposed upon the consumer who clears the outstanding payments but is still forced to wait for days to get reconnected, which amounts to more revenue loss for the water company during the waiting period. The Consumer body representative argued that water suppliers around the world have had to grapple with maintaining a supply while recovering its costs through collections from its customers as well. He said, “In many countries, the water supplier cannot disconnect the water supply to a domestic customer, schools and hospitals for non-payment.” To this end, Mahadeo told the Public Utilities Commission that those companies have instead employed systems to “woo” defaulting consumers to pay their bills. One way of doing this, the Consultant pointed out, would be to limit and reduce the flow to a defaulting consumer to a minimum quantity per day.

Against this backdrop, he told the PUC, “We hereby request a review of reconnection rates to establish a short- and long-term solution to this area of concern. We believe the review needs to consider a disaggregatio

n of disconnection costs, opportunity costs and revenue loss from disconnection. We hereby ask your consideration for a zero rate for reconnection in the short term, so long as a customer clears the agreed outstanding payments. In addition, clearing unpaid bills should result in immediate reconnection to ensure continued revenues by GWI.”

Mahadeo is adamant that consumers should not be required to wait any longer than the time it took GWI to disconnect the service. He is confident that addressing these concerns will meet the Human Rights requirements while allowing GWI to work towards such solutions that have been effectively adopted in other countries.

The memorandum on reconnection rates seek to modify the GWI Order 2 of 2018. Kaieteur News understands that 49.6 percent of metered consumers of GWI currently bear the brunt of the agency’s cost recovery efforts. Order 2 of 2018 also required GWI to increase the number of metered connections by 20,000 per year, which could have resulted in better balancing of rates, increased revenues for GWI and potential better tariffs and reconnection rates for consumers, as pointed out by the Consultant.

He explained that, “Non-payment of bills, which is the main contributor to disconnection, results from factors that are not necessarily in the direct control of consumers, including economic decisions and inconvenience due to death, sickness and other events that could well classify as force majeure.”

Further, Mahadeo said the principal aim of GWI’s disconnection is not to penalise a consumer but to protect and safeguard GWI’s assets and services against abuse and loss. As such, he noted that reconnection of a consumer inherently secures future earnings and the ongoing tariff evaluation on metered connections ultimately allows full cost recovery.

The Guyana Water Inc. responded to the Consultant’s letter on September 12, last. In that document, which was seen by this newspaper, the agency explained that it was unaware that Mr. Yog Mahadeo was a Consultant for the GCA. It nevertheless insisted “The reconnection rate in question was approved by the Public Utilities Commission after following the legal procedures of public consultations.”

Additionally, GWI said the President of the Guyana Consumer Association himself, Mr. Patrick Dial was a representative of the consumers while the review of the rates were ongoing. Mr. Dial then penned a response to the PUC explaining explicitly while he did participate in the sessions to review the GWI rates, “My presence did not and must not signal approval or Order of rates which is the remit of the PUC alone.” He also clarified that the service of Dr. Mahadeo for the GCA was published in the Guyana Chronicle since October 2018.