NWC applies to OUR for 51% tariff increase

By Clinton McGregor 

 

 

The National Water Commission (NWC) has put its approximately 500,000 customers on notice that it has applied for a massive 51 per cent increase in tariff from the Office of Utilities Regulation (OUR). 

 

At a meeting of the Public Accounts Committee (PAC) on Tuesday morning, acting president of the NWC, Kevin Kerr, said the company made its submission for the increase to the OUR last Friday. 

 

He said the OUR is expected to make an announcement shortly. 

 

"For the last seven years, the NWC took the opportunity to refine its investment plan to ensure that we align investment with what our cash can afford. And we have in recent times - as in as of last Friday - submitted a tariff to the OUR, which I believe the OUR will announce shortly. And there's an investment plan aligned with that tariff submission to ensure that the financing can be secured so we can execute on the priority initiatives in that plan," he announced. 

 

"So our submission to the OUR includes a 51 per cent increase," Mr. Kerr admitted when PAC Chairman Julian Robinson questioned what was "the nature of the increase" being sought. 

 

Mr. Kerr said the utility company is facing a revenue crisis. He warned that, if the 51 per cent increase in tariff is not approved by the OUR, the NWC would have to revise its investment plan.

 

"There are some scenarios involved. If that is not provided, we will have to revise our investment plan, to adjust with determination made at the end of the process. And as usual, the public will be required to participate in a more consultative process by the OUR over the review period," he advised.

  

NWC has said the tariff increase would place the company in a position in which its revenues would meet its expenses. 

 

The last time the NWC was granted a tariff increase was in 2019.

 

Meanwhile, Chief Financial Officer of the NWC, Fabian Christie, told the Public Accounts Committee that the company's revenues have worsened over time in terms of payments from customers. 

 

He said the tariff increase is necessary to keep pace with the company's soaring expenses, including energy costs. 

 

Mr. Christie revealed that the NWC owes the government and its contractors more than $30 billion due to the revenue crisis. Of the $30 billion owed, he disclosed that $21 billion was general consumption tax (GCT).

 

Meanwhile, Mr. Kerr has indicated that the NWC will be ramping up its programme to collect hundreds of millions of dollars owed to the utility company by its customers.

 

"So our priority one initiative is the non-revenue water. Based on the cash flow model that was presented in the business case, we won't chase all the parishes at once. We will skillfully prioritise the implementation. We will commence in Spanish Town, Old Harbour, May Pen, Mandeville, Montego Bay, Negril, Lucea, [Ocho Rios], Port Antonio, Kingston again, Portmore again, and we will utilise those benefits over a five-year period to reinvest those benefits in the other areas to ensure we can achieve the 11-year target of 30 per cent revenue water islandwide," he shared.

 

 

The Office of Utilities Regulation (OUR) has said it will communicate its decision to the NWC's tariff application within 10 days.

 

The OUR confirmed that it has received a tariff application from the National Water Commission, covering the five-year period from 2026-27 to 2030-31. 

 

The OUR said the application was received on Friday, October 16. 

 

The OUR said it will conduct an initial assessment to determine whether the application meets the requirements for a new review in terms of both form and content. 

 

The regulator said it may request additional information from the NWC before deciding whether to formally accept the application for review. 

 

The NWC last applied for a tariff review in 2018, with the OUR publishing its decision the following year. 

 

The regulator said it will continue to keep the public informed as the process progresses.