While the T&T Elec­tric­i­ty Com­mis­sion (T&TEC) con­tin­ues to be in fi­nan­cial dis­tress, its cus­tomers are ow­ing more than $1.4 bil­lion.

The main cul­prit of delin­quent pay­ment is the Gov­ern­ment who owes the elec­tric­i­ty com­pa­ny $1.2 bil­lion for sup­plies to hos­pi­tals, po­lice sta­tions, schools and oth­er agen­cies, while or­di­nary con­sumers owe the sum of $264 mil­lion.

This was con­tained in a T&TEC "Aged Analy­sis of Debt" dat­ed De­cem­ber 31, 2020, ob­tained by Guardian Me­dia, which gave a break­down of the fig­ures.

In the doc­u­ment, T&TEC di­vid­ed what its cus­tomers owe in two sec­tors–pri­vate and pub­lic–un­der the head­line "To­tal Out­stand­ing."

Un­der pri­vate, T&TEC record­ed $264,408,597.22 be­ing owed to them, while they iden­ti­fied the pub­lic sec­tor of hav­ing an un­set­tled bill of $1,199,727,372.61

Sun­day Guardian was re­li­ably in­formed that pri­vate com­pa­ny De­sal­cott, which sells de­sali­nat­ed sea­wa­ter to the Wa­ter and Sew­er­age Au­thor­i­ty (WASA), owes T&TEC $50 mil­lion. State-owned WASA, which has been de­fault­ing on its pay­ments, owes $503 mil­lion.

In a 2018 Pub­lic Ac­counts Com­mit­tee meet­ing, high-lev­el of­fi­cials of T&TEC in­formed com­mit­tee mem­bers that to un­der­stand the na­ture of ar­rears owed to T&TEC, one has to un­der­stand the billing cy­cle. They not­ed that the com­mis­sion will al­ways have ar­rears be­cause from the out­set cus­tomers are billed in ar­rears.

The com­mis­sion re­port­ed that res­i­den­tial and com­mer­cial cus­tomers con­sume elec­tric­i­ty for 60 days be­fore re­ceiv­ing a bill. Whilst the due date for pay­ment of these bills is 14 days af­ter the date of the bills, in­ter­est can­not be ac­crued on the bills un­til 30 days from the date of the bill.

Be­fore a cus­tomer can be dis­con­nect­ed, T&TEC must give he/she a re­minder no­tice, that is, at the is­suance of the sec­ond bill when the charges of the pre­vi­ous bill re­main out­stand­ing, re­flect­ing both the cur­rent bill and out­stand­ing amount from the pre­vi­ous bill.

T&TEC ow­ing NGC bil­lions for nat­ur­al gas

Ap­pear­ing be­fore a 2018 Pub­lic Ac­counts Com­mit­tee of Par­lia­ment, gen­er­al man­ag­er of T&TEC Kelvin Ram­sook ad­mit­ted that T&TEC had owed the Na­tion­al Gas Com­pa­ny $1.5 bil­lion for nat­ur­al gas.

How­ev­er, a year af­ter Ram­sook made this rev­e­la­tion, Prime Min­is­ter Dr Kei­th Row­ley an­nounced that T&TEC had owed NGC some US$700 mil­lion ($4.75 bil­lion).

Row­ley was speak­ing at the sign­ing of the term sheet agree­ment be­tween Shell Trinidad and NGC.

T&TEC pur­chas­es gas from NGC which is de­ployed to pow­er gen­er­at­ing plants Trin­i­ty Pow­ers, Pow­er­Gen and Trinidad Gen­er­a­tion Un­lim­it­ed. Since then, that fig­ure has de­creased.

T&TEC's chair­man Kei­th Sir­ju al­so ad­mit­ted that the com­mis­sion had been op­er­at­ing at a loss since 2011.

While Sir­ju in­di­cat­ed that T&TEC need­ed to trim its fat, he said T&TEC's elec­tric­i­ty rates had not been ad­just­ed since 2009.

One of T&TEC's biggest chal­lenges, they re­vealed, was be­ing owed by State-owned and pri­vate com­pa­nies.

Pri­vate com­pa­ny De­sal­cott, the com­mit­tee heard, was ow­ing T&TEC $56 mil­lion at the time.

Re­cent­ly, NGC was down­grad­ed by Caribbean In­for­ma­tion and Cred­it Rat­ing Ser­vices Lim­it­ed (Cari­CRIS).

Cari­Cris low­ered the rat­ings on the NGC’s USD 400 mil­lion debt is­sue to Cari­AA (For­eign and Lo­cal Cur­ren­cy) on the re­gion­al rat­ing scale, and ttAA on the Trinidad and To­ba­go (T&T) na­tion­al rat­ing scale from Cari­AA+ (For­eign and Lo­cal Cur­ren­cy) on the re­gion­al rat­ing scale and ttAA+ (Lo­cal Cur­ren­cy Rat­ing) on the na­tion­al rat­ing scale.

Ac­cord­ing to Cari­Cris, the down­grade is dri­ven by the high­er cost of gas from up­stream sup­pli­ers and his­tor­i­cal­ly low in­ter­na­tion­al com­mod­i­ty prices, which have re­sult­ed in com­pressed prof­itabil­i­ty mar­gins, ad­verse­ly im­pact­ed fi­nan­cial per­for­mance, and con­strained debt ser­vice met­rics.

Gon­za­les: Debt to NGC a bur­den, we have been try­ing to set­tle it

Pub­lic Util­i­ties Min­is­ter Mar­vin Gon­za­les has de­scribed T&TEC's lin­ger­ing $1.9 bil­lion debt to NGC as a "bur­den around the necks of tax­pay­ers."

The in­debt­ed­ness is from one state com­pa­ny to an­oth­er.

T&TEC falls un­der the purview of Gon­za­les.

In a tele­phone in­ter­view, Gon­za­les said T&TEC has been try­ing to re­duce its debt by mak­ing month­ly pay­ments of $80 mil­lion to NGC. "We have been try­ing to set­tle the debt."

Al­though a por­tion of the debt has been paid, Gon­za­les said T&TEC needs a re­view of its elec­tric­i­ty rates which would give the com­pa­ny the abil­i­ty to pay NGC on its own with­out hav­ing the Gov­ern­ment to stand guar­an­tees.

"We have to do a rate re­view to al­low the com­pa­ny to shoul­der that bur­den on its own with­out hav­ing to re­ly on trans­fers or the Gov­ern­ment en­ter­ing in­to cred­it arrange­ments to pay that debt. This debt is a bur­den to tax­pay­ers," Gon­za­les said.

He said T&TEC does not get a sub­ven­tion from the State but is al­lo­cat­ed fund­ing to un­der­take cap­i­tal projects.

The com­mis­sion's av­er­age an­nu­al ex­pen­di­ture is $4.3 bil­lion while its in­come is $3.2 bil­lion.

For years, Gon­za­les said, T&TEC has not been mak­ing a prof­it to un­der­take projects, re­new as­sets and pro­vide prop­er main­te­nance.

Gon­za­les said T&TEC's ar­rears and debts have con­strained "the com­mis­sion's abil­i­ty to un­der­take its cap­i­tal main­te­nance pro­grammes to en­sure the re­li­a­bil­i­ty of sup­ply across the grid. That is why I keep re­it­er­at­ing that we have to make our util­i­ty com­pa­nies fi­nan­cial­ly sus­tain­able so they can con­tin­ue to pro­vide op­ti­mum ser­vice to cit­i­zens. It is al­so im­por­tant to en­sure eco­nom­ic de­vel­op­ment and growth."

While ad­mit­ting that T&TEC has been per­form­ing far bet­ter than WASA, he said there was still room for im­prove­ment.

T&TEC has a work­force of 3,000.

Gon­za­les said his aim in 2021 is to have T&TEC en­ter in­to a Mem­o­ran­dum of Un­der­stand­ing with a for­eign elec­tric­i­ty dis­tri­b­u­tion com­pa­ny which will serve as a mod­el for the com­mis­sion.

The in­ter­na­tion­al com­pa­ny must have a proven track record and will pro­vide T&TEC's se­nior and mid­dle man­agers with train­ing, tech­ni­cal ex­per­tise and skills to im­prove its ser­vices.

"We have al­ready iden­ti­fied one com­pa­ny in Flori­da. They are al­so look­ing at oth­er com­pa­nies in Aus­tralia and Eng­land," he added.

He said this move will cost T&TEC noth­ing.