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He added that the new tariff structure is pivotal in order to correct a number of deficiencies in GWI’s existing structure and to consolidate and harmonise the tariff regime.
Baksh then highlighted these deficiencies. He stated that the current structure does not meet social equity requirements as the same class of customers is being charged different rates and some businesses are paying lower rates than residential customers.
He noted also that currently, GWI’s tariff structure has limited criteria for billing persons according to their ability to afford the service.
“This does not benefit our low-income earning customers; we propose to change this for their benefit by charging these customers according to their actual consumption of water,” the GWI CEO explained.
No water conservation
Baksh pointed out that the current structure does not promote water conservation and economy in the use of water since metered customers pay a standard service charge regardless of the amount of water they have utilized.
Therefore, it is not a progressive tariff structure based on increased rates for higher consumption of water. However, conservation of the GWI service is critical to its sustainability as well as reducing its energy costs.
In the interest of joining with the national movement for energy conservation, he maintained, this change to GWI’s current structure is vital.
He also contended that the existing structure does not cater for changes in the cost of external factors such as increased electricity rates. GWI is the largest customer of the Guyana Power and Light Company but its tariff structure has not been modified to account for the growing energy costs, Baksh argued.
“The structure does not provide an adequate revenue base from which GWI can cover its total costs. This fact is particularly important to our goal of becoming financially viable. In order for GWI to maintain this momentum of improving access to potable water, improve the level of service and the provision of safe as well as clean water, it is necessary for the company to generate adequate income which can be utilized in satisfying its operational, capital and other costs,” the GWI CEO asserted .
The PUC described GWI’s existing tariff structure in Note 10 of its Order 3 of 2005 in the following way: “The current tariff table has in excess of twenty different rate schedules, none of which has apparently been developed with the objective of making consumer prices reflect the costs of supply… Retention of both schedules appears to us to be illogical since the vast majority of the consumers live in the coastal areas and the supply conditions are therefore similar throughout. What is urgently needed is the development of a rational tariff schedule.”
Meanwhile, a request has been made to the PUC to approve the following:
– A Consolidated Tariff regime that allows for the establishment of a definitive methodology for categorizing customers;
– Differentiation between treated and non-treated water;
– Billing of unmetered customers at a rate that is closer to the cost of their average consumption;
– Reasonable discrimination between Domestic & Non –Domestic Rates; and
– Reasonable discrimination between customers in the Hinterland (Small Towns) and the more established communities
GWI is also requesting approval for the introduction of a ‘Fixed Charge’ component of the tariff similar to that approved for other utilities in Guyana; approval of the rates for the various Tariff Bands for the supply of water; approval of the rates for the various Tariff Bands for Sewerage Services; approval for the introduction of a ‘Security Deposit’ for subscribers to the Service as follows: new applicants for the service;
customers who would have had their services disconnected for non-payment; the security deposit will be refunded when the customer terminates the service; approval for new charges for ancillary services provided to customers; and approval of a mechanism for adjustment of tariffs based on an increase of electricity charges and on a request by GWI to the PUC.
Baksh said that in presenting this proposal for a new tariff structure for the water utility, GWI is cognizant of its social responsibility and the need to provide affordable rates for water service to the population, especially those segments with the least ability to pay.
At the same time, however, the utility must operate and be managed as a business if it is to become financially viable and continue to provide an efficient and reliable level and quality of service to all consumers, Baksh added.
He noted too the need for regular inspection of the water supply network, including consumers’ premises to reduce water system losses and unauthorized consumption.
GWI is also challenged with the acquisition of meter readings, but a programme is now in place to achieve their target in the next three months of reading all meters on a quarterly basis and moving to monthly reading and billing by the end of 2013.
“This plan includes increasing the staffing establishment for this purpose and the use of new technologies such as remote meter readers and hand held devices,” he said.
Unauthorized consumption
Unauthorized consumption of GWI’s water service is another challenge despite the numerous countrywide public education campaigns to inform customers about regularizing their water service.
Baksh lamented also that this is further compounded by the belief among a significant portion of GWI’s customer base that water should be free and should not be considered a commercial service.
