GOVERNMENT has again demonstrated its commitment to providing affordable electricity services to the general public, in spite of challenges to this effect.

Minister of Finance Dr. Ashni Singh, Monday afternoon, in the National Assembly, announced that Budget 2013 presented under the theme, “Overcoming Challenges Together, Accelerating Gains for Guyana”, provided for a government subsidy to the Guyana Power and Light (GPL) to support the delivery of power service, an intervention that is set to benefit every GPL customer.
The sum of $5.8B is allocated to support the power company in meeting its cash flow requirements, whilst an additional $5.4B has been allocated to shore up key projects such as the upgrade of its transmission and distribution network, the loss reduction programme, and other activities required in anticipation of the Amaila Falls hydro project.
Government has also allocated sums totalling $2.9B to meet the cost of maintaining the electricity subsidy in Linden and Kwakwani.
Minister Singh pointed out that GPL last raised electricity tariffs in 2007, when fuel prices were a fraction of what they are today.
He said, “The escalation in fuel costs have been borne by GPL in the absence of tariff increases, placing tremendous pressure on the cash flows of the company.”
The finance minister said that it was for this reason that last year government injected a transfer of $6B into GPL and as those circumstances remain substantially unchanged, Budget 2013 has made a similar allocation, he said.
These allocations to the electricity sector will benefit all 166,000 of GPL’s customers and their families.
GPL continues to make large investments in frequency conversion, additional generation and new infrastructure. At present, a 26- megawatt Wartsila plant is under construction at Vreed-en-hoop, West Bank Demerara, which is expected to be completed in the latter part of this year.
The power company is plagued by technical and commercial losses and has implemented several legal and regulatory changes to improve its capacity to tackle this challenge; however, it has not been seeing the expected results. Losses continue to stagnate about 31-32 percent of its revenue. As it stands, about 85-90 percent of GPL’s generation is done using high fuel oil, but with the hike in fuel prices, the cost still proves to be high.
In 2012, the company expended $24B of its $29B revenue to purchase fuel. Nevertheless, this cost would have been significantly higher if the company was using diesel.