JPS appeals OUR refund directive
The Jamaica Public Service Company (JPS) has announced that it will be appealing the Directive from the Office of Utilities Regulation (OUR) that it should refund over 973-million dollars to customers.
According to the OUR, the almost $1 billion was unilaterally imposed as foreign exchange adjustments on fuel supplied by Petrojam Limited from March to December 2013.
And the OUR said this was done without its approval.
In a release this afternoon, the JPS said the escalation was due primarily to the impact of the ongoing devaluation of the Jamaican Dollar.
The JPS President and Chief Executive Officer, Kelly Tomblin, said the cost of fuel is one area in which JPS is particularly exposed, because of the time lapse between when the Company is billed by Petrojam and the time it actually collects from customers.
She added that the $973 million accounts for just over one percent of the total fuel cost the approximately $73 billion paid by JPS to Petrojam in 2013.
“This Appeal is not about JPS,” she said. “It’s about ensuring that the Company is in a position to lower costs sustainably over the long-term and to continue improving service to our customers. When the Company is not able to recover legitimate business costs, it thwarts our ability to improve our operations, and achieve the fuel diversity that lowers cost and support the nation’s growth agenda,” she further explained in the release.
She also said the $973 million represents a part of the bigger issue of what constitutes legitimate cost recovery.
“It is clear that the OUR and JPS have a fundamental difference regarding what prudently incurred costs include. That’s one of the main principles on which we are asking an independent panel to arbitrate in our Appeal of the recent Rate Determination. We believe that the issue of legitimate cost recovery needs to be fully reviewed, as it has far-reaching implications for Jamaica, the energy sector and for our customers,” Tomblin explained.