Electricity Bills Should Drop By Two Per Cent This Month

JAMAICANS will see a two per cent decrease in their electricity bills starting this month, after the Office of Utilities Regulation (OUR) denied a number of proposals made by the Jamaica Public Service Company (JPS) in its annual tariff review application in May.

In a release yesterday, the OUR noted that the light and power company had asked that its annual non-fuel revenue target for 2017 be set at $50.8 billion, up from last year’s target of $45 billion. The OUR argued that if this request was granted, it would have effected an estimated average increase of 4.5 per cent on the non-fuel tariff across all rate classes.

If that proposal was approved, the typical bill for residential and small commercial customers — both non-fuel and fuel costs combined — would be increased on average by about 2.8 per cent. The typical bill for large commercial customers would have seen increases in the range of one per cent to two per cent.

The OUR said that very large (rate 70) customers will not get the 21 per cent reduction that the JPS had requested, as the regulator has instead approved the establishment of a new rate 70 category and a 10 per cent reduction in the rates for customers who fall in this class.

The JPS had argued that the reduction would incentivise this category of customers to remain on the grid instead of possibly seeking other energy options.

Audrey Williams, public relations manager at the JPS, said: “Rate 70 customers are very large customers at the top of the scale in terms of a large industrial or commercial entity… because they are consuming that much more, we were suggesting a wholesale rate which would be cheaper. It would be an incentive to persons not to leave the grid, which would be of benefit to everybody.”

The regulator also denied JPS’ claim for the retroactive recovery of returns of $336.7 million in unrecovered current portion of long-term debt for 2016, but approved its claim of J$636.7 million for 2017. Williams explained that this is based on projections.

Meanwhile, the regulator has also determined that JPS should discontinue the collection of revenues through the Electricity Efficiency Improvement Fund (EEIF), which was set up in 2009 and collected through a separate line item on customers’ bills.

“That was really part of how we were going to fight electricity theft,” Williams noted.

She explained that the EEIF is managed by the OUR and that revenues do not go directly to JPS.

“That’s never our money. It (electricity theft) is a big socio-economic problem and it is really above and beyond any one company to truly bring it down. It is major. In those jurisdictions where they manage to get it down, it is with the very strong support of their government. The Government has, in fact, been stepping up and taking various courses of action, but this one is really a major problem,” the public relations manager stated.

 

 

Re-posted from: http://www.jamaicaobserver.com/news/electricity-bills-should-drop-by-two-per-cent-this-month_110124?profile=1373