PUC fines GPL for not achieving 2017 targets, operating standards

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Despite having narrowly escaped financial penalties in 2016 from the Public Utilities Commission (PUC), the Guyana Power and Light (GPL) was not as lucky for the year 2017 as it has been fined five per cent of the total value of its dividends (monies payable to its stakeholders).

The Guyana Power and Light’s main power station on the coast, the Kingston power station.

This is according to an Order by the PUC dated April 25, 2018.

The licence granted to the Guyana Power and Light Inc. (GPL) was amended on October 4, 2010 which made provisions for GPL to submit with effect from 2011 its Operating standards and Performance Targets (OSPT) on a one and five-year basis.

The OSPT constitute the standards and quality of service that GPL is required to provide in accordance with section 25 (2) of the Public Utilities Commission Act No. 10 of 1999.

There are eight standards and targets including Customer Interruptions, Voltage Regulation, Meter Reading, issuing of Bills, Accounts Payable, Accounts Receivable, System Losses, and Average Availability.

On March 27, 2018, the Commission held a Public Hearing at Cara’s Lodge with the objective of giving GPL an opportunity to present its reviews on whether the Standards for 2017 were achieved and if not, the reasons for not achieving the targets.

In relation to the target of “Customer Interruptions,” the limit for power outages during a year should be no more than 75 for no more than 85 hours. However, for 2017, “the average number of outages experienced by a consumer for the year 2017 was 128…[for a total of] 133.18 hours…Therefore, the standard was not achieved.”

GPL blamed this shortfall of generation on a failed alternator on one of the 6.9 megawatt sets- a problem which took six months to be rectified. Voltage Regulations were not met, according to GPL.

For 2017, GPL was required to read 97 per cent of maximum demand consumers (that is Commercial consumers) and 90 per cent of non-maximum demand consumers (that is Residential Customers).

The standard with respect to both was not achieved.

For this, the Utility Company blamed the “failure to have access to the premises” and “the placement of some meters within the customer premises, [which] precludes reading which is only possible if entry is gained to the premises.”

Furthermore, in relation to the other target –Issuing of Bills-, after meters have been read, GPL is required to issue maximum demand bills within 7 (seven) days, and non-maximum demand bills within 10 (ten) days. GPL has reported that on average maximum demand bills were issued within 5 (five) days, and non-maximum demand bills, within 8 (eight) days after the meters were read.

The standard with respect to both was met.

The “Accounts Payable” target commits GPL to settle with its creditors within 26 days.

GPL reported that it took on average 26 days to settle its indebtedness with its creditors.

The standard was therefore achieved.

However, the “Accounts Receivable” target was not met.

“This standard commits GPL to a 30 days cash collection cycle. It was reported that the cash collection cycle was 35 days,” the PUC Order stated.

In the seventh target, the standard sets system losses at 27.6 per cent of dispatched power for 2017.

For the reporting period system losses were 29.6 per cent of dispatched power.

The explanations offered by the company in not meeting the target were a shortage of essential materials and meters.

Lastly, for 2017 GPL was required to achieve an average availability of 80 per cent. The company reported that average availability was  78.24 per cent.

It was explained that the unexpected failure of a number of generation sets were responsible for the standard not being met.

As such, after review, the PUC’s final decision was that GPL be penalised.

““Unfortunately, our expectations of an improved service did not materialize. The Commission, in fulfilment of its obligations and having considered the extent to which the company has failed to meet the [Operating Standards and Performance Targets], together with the impact on the Licensees’ consumers, hereby fines the company in the amount of 5% of the total value of the dividend payable to the company’s shareholders in the just concluded calendar year”, the PUC stated.

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