If Marubeni Corporation intends to be a decent and welcomed corporate citizen of Jamaica, it has much work to do to cure a culture of arrogance at Jamaica Public Service (JPS), the light and power company in which it has acquired majority interest from America's Mirant Corporation.
Should Marubeni be ignorant of the concerns we highlight, and the scope of the job ahead of it, it needs only consider how JPS has gone about implementing a hurricane recovery charge that goes back to a storm that damaged the company's infrastructure in September 2004. The JPS was in stealth mode, or for Jamaicans who tend to be versed in the Christian Bible, like Nicodemus in the night.
We choose, for now, to assume that even Marubeni was kept in the dark that the strategy was that of managers whose measure the Japanese are yet to gauge.
The legitimacy of the charge is not what is at issue here, for the money was deemed by the Office of Utility Regulation (OUR) to be owed to the JPS, even if some might question its moral authority, at this late stage, to collect. It is perhaps useful to be reminded of the context of the debt.
JPS, like other utility companies in this region, had found it difficult, if not impossible, to raise catastrophe insurance after a series of disasters in the area in the 1990s and earlier this century. The OUR, in the circumstance, approved a scheme for the JPS to self-insurance with the establishment of a Hurricane Sinking Fund to which consumers would contribute. It was expected that that fund would grow somewhere in the region of US$3 million a year.
However, before that fund had accumulated a significant amount of cash, Hurricane Ivan struck, causing severe damage in Jamaica, including to the JPS distribution lines. The company made a claim to the OUR for a charge on consumers to recover $1.4 billion, but the regulator rejected two-thirds of the bill and settled at $457.5 million. That recovery should have begun in October 2005 and stretched over two years, with consumers seeing an additional charge of about 7.4 cents per kilowatt hour on their bills.
However, JPS attempted to play smart aleck on the issue. It indicated that it would seek judicial review of the ruling, but at the same time couched its delay in implementation as an attempt to give burdened consumers a respite. Yet, Mirant wanted more.
Now, the JPS, the OUR having reaffirmed its original ruling, slipped in the charge on its July bills without any notice to consumers. The explanation by the company's corporate communications manager, Ms. Winsome Callum, that there was no time to develop a communication/education strategy for consumers, hardly cuts a dash. Rather, it smacks of the cynicism and arrogance for which the company came to be known under Mirant leadership.
If Marubeni were not involved in this latest grotesque act of disrespect by JPS to its customers, the Japanese should be clear about who should not be hanging around with the new managers.
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