THE Public Utilities Commission (PUC) has approved increase in rates and tariffs by the Guyana Water Inc (GWI) but has given the company several deadlines to improve its water services to international standards.

In an order released on June 7, 2018, the PUC approved the rates increase be implemented in two phases beginning on October 1, 2018 and again on October 1, 2019 to alleviate the financial burden on consumers.

These changes come after GWI indicated that its revenue streams are insufficient to meet its operating costs and the utility was still operating under the 2005 tariff regime.
The PUC arrived at its decision following a series of hearings between GWI, the Consumers Association and members of the public in the months of February and April.
Beginning October 1, 2018 metered residential consumers will pay a monthly fixed charge of $250 and a monthly consumption charge of $86 per m3 for those in the $60.90 category while all others will pay $112 per m3.

From October 1, 2019, all metered residential consumers will pay a monthly fixed charge of $500 and a monthly consumption charge of$112 per m3.
For unmetered residential consumers, there will be a monthly fixed charge of $250 in 2018 to be increased to $500 in 2019 while the monthly consumption charge for 2018 stands at $1,100 which will be increased to $1,450 in 2019.

Metered non-residential consumers in 2018 will pay a monthly fixed charge and a monthly consumption charge of $250 and $125 per m3 respectively and $500 and $150 per m3 respectively for 2019.

Unmetered non-residential small commercial and small industrial consumers will be billed monthly fixed and monthly consumption charges of $250 and $2,200 respectively in 2018 and $500 and $3,000 respectively in 2019.

Meanwhile, unmetered non-residential medium commercial and medium industrial consumers will pay $250 and $5,700 for monthly fixed and monthly consumption charges in 2018 and $500 and $8,000 for the same in 2019.

Unmetered Non-Residential large commercial and large industrial consumers will both pay a $250 monthly fixed charge in 2018 and $500 increase in 2019.
However, unmetered non-residential large commercial and large industrial consumers will respectively pay $13,000 in 2018 and $15,000 in 2019; and $21,000 in 2018 and $24,000 in 2019.

Metered and unmetered pensioner consumers will pay no monthly fixed charge but metered pensioners will pay $74 per m3 for the first 10 m3; $86 for each m3 from 2018 and $112 for each m3 from 2019.

Meanwhile, unmetered pensioners will pay $740 per month. The body did not approve the different tariff bands proposed by GWI for sewerage and, as such, the monthly charges for residential, pensioners and non-residential consumers stand at $417, $417 and $2,860 respectively.

ANCILLARY CHARGES
There were also tariff increases made to category of ancillary charges which include reconnection fees, tamper fees, charges for damaged meters and more.
In the order, the PUC stated: “The commission directs that there should be strict compliance with the rates attached to each category.”

However, in return for the increase of rates, the PUC said that the GWI will be required to meet a series of targets and must report its performance to the commission bi-annually beginning January 1, 2019.

The order took note of where in 2004 GWI failed to meet commitments to improve service standards and to have its tariffs be sufficient to cover operation and maintenance costs as Schedule 1 of its license prescribes.
It highlighted, too, that despite tariff increases in 2005 and government subventions from 2005 to present; the company has been unable to cover its operations, maintenance and depreciation charges.

As such, new requirements set by the PUC state that non-revenue water should be reduced in 2018, 2019, 2020 and 2021onwards respectively by 1.5 per cent, 2.5 per cent, 3 per cent and 4 per cent until accounting for less than 15 per cent of total production.

METERED CONSUMERS
The water company must also meter un-metered consumers in the order of 5,000 consumers in 2018 between October 1 and December 31 and 12,000 consumers in 2019 between January 1 and December 31.

From 2020 and onwards, GWI will be required to meter 20,000 un-metered consumers each year, thereafter until 100 per cent of all services are metered.
“A positive consequence that should emerge from the granting of GWI’s request for increased rates is heightened activities in metering and non-revenue water programmes which will generate additional cash flows and/or reduce the operating cost to the company.
“It is hoped that this cycle would be progressive to the point where the consumer would receive water in compliance with WHO [World Health Organisation] standards while placing the company on a stable financial base,” the order said.

Added to this, the PUC stipulated that the consumer database should be continuously sanitised to reflect legitimate debtors no later than June 30, 2019 and that collection rates on annual billings be increased yearly to 96 per cent by December 2020.
Also, all disconnected consumers which have not been legitimately reconnected should be revisited within 60 days of being disconnected to rule out illegal reconnections and the collection outstanding balances should be rigorously pursued.

The PUC said that as a part of its functions and duties, it must ensure that the standards and quality of service of any public utility is met while balancing both the interest of investors and consumers.

The body adds that even with the rates increase, this will not “return the company to profitability” and to achieve its current 2017-2021 Strategic Plan, government subventions may still be needed.