Wed | Nov 21, 2018

NWC applies for rate increases

Published:Thursday | October 18, 2018 | 1:04 PM

The National Water Commission (NWC) has applied to the Office of Utilities Regulation (OUR) for a review of its current charges.

The last such review was undertaken in 2013.

The NWC is proposing a 23 per cent average increase in revenues for water charges and a 38 per cent average increase in revenues for sewerage charges.

The total revenue requirement associated with the proposed increases is J$33.9 billion (J$26.1 billion for water charges and J$7.8 billion for sewerage charges).

Additionally, the NWC is proposing, among other things, the following changes to its rate structure:

* A consolidation of its residential rate blocks from six to three. The first block, which represents a typical household consumption, would see a five per cent increase in rates.

*  The introduction of a decreasing block tariff for commercial customers with consumption above two million imperial gallons/month (9.1 million liters/month).

*  An increase in the first block of commercial, condominiums and schools’ rate categories by 36 per cent for water and 46 per cent for sewerage.

* The introduction of standby charges for major commercial customers who only use NWC services as a backup supply.

Further, the NWC is requesting that the price cap tariff reset period run for three years (2019- 2021) instead of the customary five (5) year review period. 

They are also proposing that:

* The K-Factor variable, which was approved in the 2013-2018 Tariff Determination to finance OUR approved capital infrastructure projects, remains at 16 per cent. 

* The X-Factor, that is the productivity efficiency factor, be set to zero per cent until 2021 when the efficiency gains are to be reviewed.

* The inclusion of a Z-Factor provision as a special adjustment to the Price Adjustment Mechanism (PAM) to account for exogenous events that affect costs, not due to NWC’s managerial decisions and which are not captured by the other elements of the price cap regime. 

The NWC asserts that its tariff submission supports its objectives of improving and expanding potable water and sewerage services, encouraging and improving operating efficiencies and creating the financial viability necessary to sustain its operations.

Starting 2018 October 30, the OUR will host public consultations with NWC customers to get their feedback on the application.

NWC rate review consultation schedule 

Kingston & St Andrew - October 30, 2018, at 6:00 p.m. at the Meadowbrook High School Auditorium.

Portmore, St Catherine - November 6, 2018, at 6:00 pm at the HEART College of Construction Services (formerly Portmore HEART Academy), Waterford, St Catherine.

Morant Bay, St Thomas - November 8, 2018, at 6:00 p.m at the Morant Bay Anglican Church Hall, 1 East Street, Morant Bay, St Thomas.

Ramble, Hanover - November 13, 2018, 6:00 p.m at the Knockalva Technical High School, Ramble, Hanover. 

Port Antonio, Portland - November 20, 2018, at 6:00 p.m at the Ken Wright Terminal Building, Port Antonio Marina, Portland.

May Pen, Clarendon - November 22, 2018, at 6:00 p.m at the St Gabriel’s Anglican Church Hall, May Pen, Clarendon.

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