Wed | Dec 13, 2017

OUR determines customers to pay less for electricity

Published:Tuesday | September 5, 2017 | 11:58 AM

Jamaica Public Service (JPS) customers should see a two per cent decrease in their electricity bills effective September 1, based on the Office of Utilities Regulation’s (OUR’s) decision on the company’s annual tariff review application.

JPS had asked that its 2017 annual non-fuel revenue target be set at $50.8 billion.

If JPS’ request was granted, it would have translated to an estimated average increase of 4.5 per cent on the non-fuel tariff across all rate classes, the OUR said in a release.

This would have seen the typical bill for residential and small commercial customers, that is, rates 10 and 20, increasing on average by about 2.8 per cent. The typical bill for large commercial customers, that is, rates 40 and 50, would have seen increases in the range of one to two per cent.

The OUR said the effect of it determination is that there will be a 1.8 per cent overall reduction on the average customer’s bill.

The regulator said this reflects the net of, among other things, termination of the Electricity Efficiency Improvement Fund (EEIF), valued at US$6.5 million annually. The EEIF was established in 2009 and collected through a separate line item on customers’ bills.

Based on the OUR’s determination, rate 10 and 20 customers’ will see a 1.6 per cent decrease; rate 40 and 50 customers a two per cent decrease, and a new class, rate 70 customers will also see a two per cent decrease in their bills.

The OUR said it has approved the introduction of the new interim rate 70 class for customers whose peak demand at a single location is at, or above, two mega volt ampere.

 JPS had proposed the introduction of the new wholesale rate class amidst concerns of grid defection, and the impact it would have on remaining customers.

The OUR said JPS had asked for a 21 per cent reduction in bills for this category of customers, arguing that this would encourage them to remain on the grid and thereby prevent the resulting steep increase in the cost of electricity to other rate classes, including smaller customers.

“While not accepting the proposed 21 per cent reduction in the average rate for these customers, the OUR approved the establishment of an interim rate 70 class and a 10 per cent reduction in the rates to customers who fall within this new rate class,” the regulator said.

The OUR also approved a Community Renewal Rate to be charged for residential service at a flat rate of J$9.59 per kilowatt hour for consumption up to 150-kilowatt hour.

That is a special tariff for persons who are on the Programme of Advancement Through Health and Education. Such customers consuming more than 150-kilowatt hour per month will pay the regular prepaid or post-paid rate, whichever is applicable, for the incremental consumption above that level.

The OUR denied JPS’ claim for the retroactive recovery of returns of J$336.7 million in respect of unrecovered current portion of long term debt in 2016. However, it approved the light and power supplier’s claim for J$636.7 million for 2017.

- business@gleanerjm.com