Fri | May 26, 2017

OUR instructs JPS to cut rates

Published:Friday | January 9, 2015 | 1:00 AM

Daraine Luton, Senior Staff Reporter

Jamaica Public Service Company (JPS) customers will be required to contribute to a dedicated fund, through their light bills, to enable the light and power company to convert its Bogue plant from diesel usage to accommodate the use of gas-based fuel.

The fund, which has been approved by the Office of Utilities Regulation (OUR) in its rate determination for the JPS, will see consumers contributing a total of US$15 million over a 12-month period.

Even with this new charge, however, consumers are expected to pay lower light bills.

Residential customers, for instance, will see their bills reduced by 1.9 per cent when calculations are made based on last November's bill. This comes after the OUR decided that there should be a 0.96 per cent reduction in the non-fuel rates.

The JPS had proposed to increase the residential tariff, on average, by 21 per cent. The company, in submitting its application for a rate increase last year, proposed that residential customers with monthly consumption of less than 100kWh receive an average tariff increase of 17 per cent.

If the OUR had granted the 17 per cent increase, it would have affected 222,531 low-income families who make up 41 per cent of the residential class.

In the case of Rate 20 customers, who represent medium users, the JPS proposed an increase of 15 per cent on average for consumption below 7,500kWh per month. The OUR, however, determined that a reduction of five per cent for that rate class was necessary.

LOWER REDUCTION

The JPS had proposed to reduce the overall cost to the Rate 50 customer class, comprised of industrial companies, by an average 1.50 per cent, but the OUR's determination, using November 2014 bills as a benchmark, will see the bills of these users reduced by only 1.1 per cent.

Rate 50 customers account for 30 per cent of the JPS's revenue.

Albert Gordon, the OUR's director general, said the methodology for the tariff-review process and how the rates should be calculated is set out in JPS's licence, "and we have adhered to that methodology, while taking into consideration other relevant factors".

daraine.luton@gleanerjm.com