— narrowly averts financial penalties

THE Guyana Power and Light Incorporated (GPL) has failed to meet a number of its Operating Standards and Performance Targets (OSPT) for 2016 and has received a stern warning from the Public Utilities Commission (PUC).
GPL, pursuant to an amended licence granted by the PUC in October of 2010, is required to submit annually, OSPTs to the commission. Those standards are included in the entity’s approved Development and Expansion Programme and represent the standards and quality of service GPL is required to provide in accordance with section 25 (2) of the public Utilities Commission Act, Number 10 of 1999.

There are eight standards to which GPL has to report: Customer Interruptions, Voltage Regulation, Meter-Reading, Issuing of Bills, Accounts Payable, Accounts Receivable, System Losses and Average Availability.
By March 30, annually, the PUC reviews GPL’s performance for the previous calendar year relative to the OSPTs and determines whether the entity has failed to achieve or reach the established targets.

Should there be a failure, the PUC will determine the impact the failures had on consumers and company and may impose penalties on the company in an amount not exceeding 25 per cent of the total value of the dividends payable to the company’s shareholder (s) for the identified calendar year in accordance with the law.
At a public hearing by the commission at Cara Lodge, Quamina Street, Georgetown, on March 27, it was discovered that GPL fell short in several of the aforementioned areas and determined that the company experienced several challenges which affected the provision of an efficient service to consumers.

“There remains much work to be done and we can only hope that there continue to be annual incremental improvements in the quality of service to consumers,” the commission said in a statement to the media on Friday.
The PUC said it finds GPL’s efforts credible, but for system losses and noted that with greater commitment, losses could have been lower than 2015.
Additionally, the commission said that given the importance of the particular standard, the 2016 performance casts a shadow on the overall performance of the OSPTs.

NOT EXCESSIVE
“Having regard to all we have heard and noted and taking into consideration the explanations offered by the officials of GPL, we do not think it appropriate at this time to make any award of monetary penalty on the company. Their failure to meet certain targets as adumbrated was mitigated by the fact that they were not excessive and the impact on consumers was not inordinately burdensome.”

Moreover, the Commission Chaired by Justice Prem Persaud said there is no intention to have the decision held as a precedent for the current performance of the company and hopes that GPL can fulfil its mandate in providing a safe service at reasonable prices.
In the case of customer interruptions on the System Average Interruption Frequency Index (SAIFI), GPL was expected to limit the number of outages a consumer received to no more than 75. However, the average number of outages per consumer in 2016 stood at 118.
The utility company said its failure to meet the standard is a result of the malfunctioning of the submarine cable used to transfer power from the Vreed –en-Hoop power station to the Demerara Interconnected System.

This resulted in 16 megawatts of power being lost to the Demerara system and GPL having no reserve capacity in the Demerara Interconnected System, was forced to revert to older stations that are not always reliable.
In response, the commission noted that the performance of the company has deteriorated significantly in this specific category and had caused distress to the consumers
In relation to the System Average Interruption Duration Index (SAIDI), the intention was to limit the average duration of outages that a consumer would have received in 2016 to no more than 90.

However, the average duration experienced by consumers was 125.8 hours.
The malfunctioning submarine cable was also given as the explanation for not meeting the identified target in 2016.
The voltage regulations were also not met. Part 1 of the standard states that “GPL shall seek to maintain in stable conditions, voltages of ± 5 per cent of the nominal voltage and ± 10 per cent following a system disturbance.”

The company indicated from the inception that it would be difficult to monitor and report on the voltage supplied to each customer. This standard was not measured previously.
It was however stated that when the planned programme for the installation of AMI meters is completed countrywide, the company would be able to randomly access data from the registry of these meters that would inform on voltage fluctuations.
The information provided from these random samples should inform whether it is delivering a quality of voltage consistent with the standard.

Part 2 of the standard requires that GPL complete 100 per cent of customer voltage complaints due to network reconfigurations, vegetation upgrade of lines, additional transformer, etc in no more than 30 days.
GPL has reported that this target was marginally not met.

EXTENSIVE RECONFIGURATION
The utility company indicated that at times the job may require extensive network reconfiguration and there may be problems with material availability, resulting in a temporary postponement until the materials are sourced.
“Sometimes addressing a voltage problem may require a feeder line to be de-energised that will result in load-shedding to consumers supplied with electricity from the said line. In some instances, the company may postpone the job until such time as maintenance is due on the line. The voltage complaint is then addressed when maintenance work on the line commences,” GPL explained.

However, the commission has recommended that GPL refrain from beginning work unless it is certain that it has all materials on hand.
“Overall, we believe the inconvenience suffered by the consumers to be marginal,” the PUC said.
In the case of meter-reading, which is aimed at reducing the number of annual estimated billings based on actual meter-readings, GPL was required to read 97 per cent of maximum-demand consumers and 90 per cent of non?maximum- demand consumers.

Neither standard was achieved. For non?maximum-demand consumers, 94 per cent of the bills were read; and for maximum-demand consumers, 88 per cent of the bills were read.
GPL based its results on two challenges, namely: inability to have access to premises and the changes in personal lifestyles. In the latter case, the company said the proliferation of housing schemes throughout the country coupled with the fact that very often no one is at home during the day when the meter readers visit, make it difficult to have access to the meters.

Notwithstanding that, a number of measures were implemented to overcome those challenges but have not been successful and the company pointed to the hand-held devices used to read data stored in meters. Oftentimes, those devices were unable to read the meters which in some cases meant the meters were faulty.

IMPROVEMENT
Meanwhile, while GPL has failed to meet its accounts receivable target which stipulates it must have a 30-day cash-collection cycle, the company has maintained that its collection cycle has improved over the previous year as a result of the efficient dispatching of bills to consumers and more timely payment by customers that were traditionally in default.
GPL’s average cash-collection cycle was 37 days in 2016.
Also, the utility company noted that the standard would be difficult to meet since the company gives 21 days credit periods and a further 14-day grace period before taking action to enforce compliance.

However, the entity has registered its concern about Neighbourhood Democratic Councils (NDC) and the Mayor and City Council (M&CC) not making payments in relation to street lights.
As it relates to system losses, the standard is set at 28.6 per cent of dispatched power for 2016 and the company reported that system losses stood at 29.2 per cent of dispatched power that year.
It explained that the Loss Reduction Division was closed for approximately three months to facilitate an investigation of the division.

In response, the PUC described the reason as disappointing, noting that a system loss of one per cent translates to approximately $200M. The increased loss of 0.6 of one per cent over 2015 translates to a loss of $120M.
“The statement by GPL at the hearing casts a damming indictment on the employees of the company. When an admission is made that workers have to be monitored, condign actions should have been taken to have them not only disciplined but dismissed from the service.”
The commission added that it is yet to be convinced that the closure of the Loss Reduction Department is the main reason for the target not being met.

“The reason for the failure may have more to do with the inability of the company to commence its metering programme envisaged in its 2016 to 2020 Development and Expansion Programme. The metering of consumers as planned in the D & E Programme should in theory significantly reduce commercial losses and by extension reduce the overall percentage of system losses. We trust that for 2017, GPL will report positively on this standard.”