OUR defends 7% rate increase to JPS

 

Director General of the Office of Utilities Regulations (OUR), Ansord Hewitt, is defending the decision of the agency to grant a 7 per cent bill increase to the Jamaica Public Service Company (JPS) post Hurricane Melissa.

 

The adjustment, which will be reflected in November's bill, has sparked outrage among JPS customers who expressed shock at the timing of the rate hike.

 

The OUR had argued that the storm resulted in an estimated 30 per cent reduction in electricity sales, which contributed significantly to the increase in fuel and independent power producer rates. 

 

Energy Minister Daryl Vaz expressed concern about the timing of the increase. 

 

The Energy Minister, addressing a press briefing on Tuesday, confessed that the approval by the OUR underscored a number of issues the government has with the current JPS licence. 

 

Speaking on Radio Jamaica's Hotline, with host Emily Shields, on Wednesday, Mr. Hewitt admitted that the OUR had to grant the adjustment based on the JPS licence.

 

He declared that the rate increase could have been much higher - about 45 per cent. 

 

"The JPS had simply said, look, this is what the charge is this month, and we need to pass it on. There was no negotiation. That would have been in the order of 40 per cent. But over time, we have agreed that, look, despite the fact that you are entitled to this pass through, we have to manage it, because your customers are to be protected against rate shocks," he recounted.

 

Mr. Hewitt said the JPS "accepted that as a reality", and after further engagements, the parties agreed on the 7 per cent hike, spread over six months, to "make sure that you don't have the kind of rate shocks that would have been delivered by a 40 per cent increase". 

 

Still, the OUR boss believes that JPS customers should see a reduction in their electricity bills in coming months, once there is improvement in the operations of the light and power company and the fuel and IPP charges return to normality.