'We are hurting badly'
Published:Sunday | July 31, 2011 | 12:00 AM
Arthur Hall, Senior Staff Reporter
Horror stories about sharp increases in Jamaica Public Service Company (JPS) bills have become the norm across the island over the past two years, but the painful story of Agri and Industrial Packaging Company is one for the record books.
The company, which includes among its staff about 20 persons who are hearing and speech impaired, is now staring closure in the face because of a sky-rocketing electricity bill.
In January 2010, the company's monthly electricity bill was $1.2 million; by April 2011, the monthly bill had climbed to $3 million.
That is a more than 100 per cent increase in just over a year, leaving the once profitable concern now struggling.
"Our bill moved up from $1.2 million to about $2 million about October or November last year, and that went on to April this year then suddenly, with no change in our equipment and our manufacturing process, the bill went to $3 million in May," Hugh Gray, CEO of Agri and Industrial Packaging, told a recent Gleaner Editors' Forum.
"We were in such a state of shock that we dispatched two of our staff to meet with the JPS, and I went to meet with the OUR (Office of Utilities Regulation) people.
"We wrote and we asked for any help and for somebody to investigate this horrible situation because we had made no changes. In fact, we were producing less in May then we had produced in April or the months before," added Grey.
He said with the 50 per cent jump in its bill from April to May electricity became 18 per cent of the company's total production cost.
Set up for disaster
"That is a straight set up for ultimate disaster in any manufacturing entity," Gray declared.
According to Gray: "We met with OUR, we met with the JPS people and we asked them what was the reason for this, but nobody has given us a proper answer."
He noted that long before the sharp increase in his electricity bill he had followed technical advice and moved his manufacturing process to a time-of-use option where most of the company's production was done in the off-peak period which attracts the lowest JPS rate.
With no satisfactory answers from either the JPS or the OUR, except a projection that electricity rates should come down by about 30 per cent with the introduction of liquefied natural gas as a source of energy, Gray pleaded for assistance from recently appointed Energy Minister Clive Mullings, who was also at the Editors' Forum.
"Mr Minister, we have an immediate situation and what I am hearing about is 2014, what happens now? ... I have to start laying of some of my staff, and the OUR is telling me to go back to JPS. I have spent $750,000 to have people check out my machinery and they have found nothing wrong."
Gray noted that the JPS is allowing the company to pay on a phased basis, but that is little comfort as the money will still have to be found.
"I am telling you that more manufacturers are going to die, including myself, within three months," Gray warned.
For his part, Mullings suggested that manufacturing companies could consider generating their own electricity but he accepted that there was no "quick and easy fix" to the problem of high electricity cost.
"What is clear is that we are reaping the results of our failure to invest in energy ... but, in the interim, we have to look at how JPS can engage the customers who simply cannot pay," said Mullings.