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OUR says no to $4-billion JPS claim

Published:Thursday | March 4, 2010 | 12:00 AM
Corporate headquarters of Jamaica Public Service Company Limited, Knutsford Boulevard, New Kingston. - File

Philip Hamilton,
Gleaner Writer

A claim by the Jamaica Public Service Company Ltd (JPS) to recover more than $4 billion from its customers has been rejected by the Office of Utilities Regulation (OUR).

The claim had been filed by the company through its z-factor provision of the All-Island Electricity Licence of 2001, in respect to payments made to its workers following a reclassification exercise completed in 2002.

JPS had proposed that consumers pay $4.2 billion over a two-year period by adding 6.75 cents per kilowatt-hour charge to the bills of all its customers.

The company had previously challenged the results of the reclassification exercise which were subsequently turned over to the Industrial Disputes Tribunal (IDT), which ruled in favour of the workers.

The light and power company later took the matter to the Supreme Court and the Court of Appeal which, in 2007, further upheld the lower court's ruling.

After paying out $2.3 billion in mid-2008 to workers and ex-employees, JPS later submitted a claim in 2009 as part of its application for rate review to recover what it said was the cash flow impact associated with the award.

But the OUR declared that both matters should be separated and that the application with regard to the wage claim should be treated on a stand-alone basis.

The OUR said the company's claim did not qualify under the z-factor provision, since the costs incurred were as a consequence of managerial decisions, as the JPS had agreed with the labour unions in 2000 to embark on the reclassification exercise.

Aggravated costs

The regulator further indicated that JPS had aggravated its costs by submitting the IDT's ruling in favour of the workers to the Supreme Court, in addition to filing an appeal in the Court of Appeal.

When asked to comment on the OUR's ruling, Winsome Callum, JPS head of corporate communications, told
The Gleaner
last night that the company, which had received the OUR's determination on Tuesday, would analyse it and decide on a course of action in keeping with the procedure allowed in the licence.

She said the application on which the OUR ruled was done in keeping with the procedure outlined in the licence, and that any further action decided on by the company would be done in keeping with the terms of the licence.