…gov’t prepared to pay capital costs, but consumers must meet operational costs
PRIME Minister Sam Hinds has defended the decision to increase the electricity tariffs at Lethem, in Region 9 (Upper Essequibo/Upper Takatu) saying that maintaining the old rates is unsustainable.
He made this policy statement in response to a petition in the National Assembly from some residents at Lethem calling for the Lethem Power Company Inc. (LMPC) to rescind its decision in relation to the increases.
The petition was moved by A Partnership for National Unity (APNU) Member, Mr. Sydney Allicock during a sitting of the National Assembly yesterday.

Allicock stated that the residents were complaining that their electricity tariffs had been raised from $45 per hour to $75 per kwh, an increase of some 54.6% with effect from January 1, 2014, and that this decision had been arbitrarily imposed without any form of consultations with them.
In response, Prime Minister Hinds denied that there had been no consultations.
He said that he had held meetings with these very residents and they had all agreed that the government would provide the equipment to upgrade the electricity at Lethem but they would pay the costs for the operations and maintenance.
He said: “Given this, it is an unconscionable act for the good citizens of Lethem to be coming here with a petition of this nature. I can only assume that they have not taken time to look realistically at the situation.”
He explained that historically the tariffs for electricity were set in 2004.
This was at a time when electricity was being provided by the Moco Moco Hydroelectricity Project, which had been constructed in 1999 at Moco Moco, south of Lethem at a cost of some $700M.
The electricity situation remained stable until 2004 when the hydro electricity plant at Moco Moco was damaged by a landslide and has not worked since.
He said that since the Moco Moco disaster, the electricity for Lethem has been produced by diesel generators using light fuel oil, and as a consequence, there had been a significant increase in the operating costs for production of the electricity.
He said that the reality was that the operating costs largely borne by the government has amounted to about $100,000 per year per customer at Lethem and its environs.
“There is no way that we could maintain an average expenditure of $100,000 per household each year as has been happening. This is something that the country cannot afford.”
He further asserted that after Moco Moco, the government had made it clear that the operations, including maintenance, would have to be covered by the consumers.
He said that there were two consultations with the residents of Lethem and this policy was accepted.
He stressed: “It was agreed that government would put in the capital requirements and consumers would pay a price that meets the operational costs; this was accepted as a principle.”
He added that it was also agreed at meetings with residents that the increases would be delayed until new generators were installed at Lethem.
Government has since acquired these generators and they are to be installed shortly.
He said that the petition suggests that the residents of Lethem have ignored the fact that all through the years, the position of government has been that it would advance electrification in the hinterland and will cover capital costs, but all operational costs, including maintenance, would have to be met by the consumers.
He said that government was on the side of the poor as seen by the installation of some 13,000 solar panels in hinterland communities at minimal charge to the beneficiaries.
He said: “We have at this moment other communities that are calling on us to move them from four hours to more; eg: Mabaruma; Kamarang also. These communities have accepted the policy, they have agreed to meet the costs.”
He stressed that the government could not extend the former rate of tariffs at Lethem.
“We could not extend the situation; we want to grow, but we cannot do so by placing greater and greater burdens on the treasury; we cannot base our expectations on those days before the collapse at Moco Moco, as referred to in the petition.”
He stressed that the petition is ill-informed, since it seeks to entrench situations which the community has grown away from; and if this approach were to be taken, it will limit the pace of the advancement of electrification.
He stressed: “The Policy is that government will endeavour to put in the capital costs and the beneficiaries have to meet the operational costs. We think that that approach is quite appropriate.”