The Grenada government says it has decided to discontinue the 25 percent nonfuel charge associated with electricity supply by the island’s lone power company, noting that the company had been losing “significant revenue” as a result of the measure.
Prime Minister and Minister of Finance, Dickon Mitchell, speaking at the weekly end of Cabinet news conference, told reporters that the state-owned Grenada Electricity Company (GRENLEC), had as of September 12, had accumulated EC$16 million (One EC dollar-US$0.37 cents) in losses due to the initiative that had been put in place by the previous administration to cushion the impact of increased global energy prices.
“That has had a very negative impact on the cash flow of GRENLEC and on its ability to meet its commitments as they fall due. In the circumstances this particular aspect of the stimulus package, as difficult as the decision is, is not sustainable,” said Mitchell.
He told reporters that his administration cannot risk jeopardizing the financial stability of the electricity company by continuing with this part of the stimulus package.
“So the discount will be discontinued (and) based on GRENLEC’s billing cycle …the impact if any, will probably be felt around November of this year. We, however, are going to look at alternative measures to cushion the impact, particularly for customers who consume less than or up to 100-kilowatt hours per month.”
Mitchell said the statistics provided by GRENLEC suggest there are 15,000 households and small businesses to be affected “and so we will look to see what measures can be taken from the government’s perspective to cushion the impact…”
“We are hopeful that if the fuel prices for electricity continue to trend downwards that eventually, we will also see a downward trend in the cost of electricity,” he said, adding that his administration is mindful of the cries from consumers about the high cost of the product.
“But we also have to be honest with the population (and) to a large extent the cost of electricity is determined by the price of fuel, and we all know that worldwide the price of fuel has gone up significantly partly because of the Russian –Ukraine war…”
Mitchell said the power outages that have been occurring on the island in recent times have been due, according to GRENLEC “mainly because one of its main engines has in the last months or so experiencing some technical glitches”.
He said the engine is still under warranty and an official from the company is on the island assisting in finding a solution to the problem.
But he acknowledged that the state-owned company will need “significant investment” in the coming months if it is to continue to meet the demands for the growing consumer base.
CMC/
