Light and power company Jamaica Public Service (JPS) has asked the Office of Utilities Regulations (OUR) to approve an increase in its annual revenue target to $45.07 billion, up from a base year target of $40.6 billion, or a jump of 9.53 per cent.
“This increase includes fluctuations in the value of the Jamaican dollar against the United States dollar and the inflation in the cost of providing electricity products and services,” the Our said in a press statement.
The OUR is currently reviewing the JPS’s submission for its annual tariff adjustment for 2016. The request for tariff review was made on May 4, 2016, and the OUR is expected to complete its review and issue its determination by July 3, 2016, the regulator said.
“The adjustment will be the first under the provisions of the new Electricity Licence, 2016. On January 27, 2016, a modified licence was issued by the Government of Jamaica to JPS. The provisions of the new licence fundamentally changed the regulatory framework and the methodology for the calculation of the tariff,” the statement said.
If granted, the JPS’s submission for an adjustment, which is in keeping with the provisions of the Electricity Licence 2016, that allows it to make annual filings to the OUR, will require the OUR to apply the amended provisions of the licence in respect of such matters as adding a surcharge to the revenue requirement.
This includes a surcharge from foreign exchange, interest rate and revenue. JPS is proposing to add on $526.6 million which represents the foreign exchange and interest surcharge. As a result of the amendments to the licence, JPS is now allowed to include the total net interest expense or income which is paid or earned in the revenue requirement.
Additionally, the Kelly Tomblin-led JPS is now entitled to an adjustment on its revenue requirement for any foreign exchange loss which it may incur in the prior year in relation to working capital and debt service driven by Jamaican to US dollar exchange results.
The company is also entitled to adjustments to the 2014/2015 approved prepaid rates for the Residential Rate 10 and Commercial Rate 20 customers, and to introduce interests rates on outstanding balances owed by commercial and the Office of Utilities Regulation (OUR) is reviewing the Jamaica Public Service Company Limited (JPS) submission for its annual tariff adjustment for 2016. The request for tariff review was made on May 4, 2016, and the OUR is expected to complete its review and issue its determination within 60 days, that is, by July 3, 2016.
Re-posted from: http://www.jamaicaobserver.com/news/10–increase-_61762