By Al Edwards, Staff Reporter
THE JAMAICA Public Services Company (JPSCo) set out its reasons why a review of the current tariff structure was needed at a public hearing put on by the Office of Utilities Regulation (OUR) at the Petroleum Corporation of Jamaica (PCJ) Auditorium, New Kingston on Monday.
The public utilities company has made an application to OUR for a change to the current tariff structure which will, in effect, increase the overall average tariff by 12 per cent.
This is expected to bring in an additional $17.6 billion (16.5 per cent increase) on a 12 monthly basis from when the tariff is introduced. This figure represents a $2.9 billion increase over current revenue. An assumable sales growth of 5.3 per cent and a foreign exchange depreciation rate (on the US dollar) of 9.4 per cent were factored in to arrive at this sum. Last year the JPSCo incurred losses of 15.8 per cent.
The OUR will make its recommendations to the Minister of Mining and Energy, Robert Pickersgill who, in turn, will make a final decision on the application.
The effective date for the changes to the tariff structure has been proposed for next month and if approved will be reflected in JPSCo' customers' bills prepared in September for the previous month's consumption.
JPSCo claims that a rate restructuring is required in order that customers in the various rate categories pay the true cost associated with the service supplied to their rate bills, with residential customers expected to pay more on their electricity bills.
Currently, industrial and commercial customers cross-subsidise residential customers. JPSCo intends to eliminate this cross-subsidisation. If this element of the tariff application is approved, residential customers who are largely responsible for the daily peak (between 6:00 pm and 10:00 pm) will pay higher sums relative to commercial customers, who tend to close their businesses at 5:00 pm.
The changes proposed in the tariff submission are as follows:
The realignment of the tariff to reflect the actual cost of electricity per customer category.
A return to the 75 per cent foreign exchange adjustment mechanism.
The unification of the non-fuel and fuel elements of the tariff in a single energy rate.
The establishment of a Three Period Time of Use (TOU) option for large commercial and industrial users.
The extension of Kilovolt Amperes (KVA) demand billing for all large customers (RT40/50).
The reduction of the billing demand ratchet
The separation of large customers (RT40/50) into sub-groups, based on voltage levels.
The application of a revised transformer ownership.
The introduction of a standby rate classification.
The chairman of the JPSCo, Professor Gordon Shirley speaking to The Gleaner said: "We had proposed that the Lifeline ceiling be moved from 100 kWh to 50 kWh per month in keeping with levels more consistent with basic electricity needs. We proposed that the subsidy apply only to customers at or below the 50 kWH lifeline ceiling. This would be effected by separate tariffs for lifeline and non-lifeline customers which differs from the present tariff structure, whereby all customers benefit from the Lifeline rate for the first 100 kWh. However we are now in discussions with OUR to keep the ceiling at 100 kWH."
Both the president of the National Democratic Movement (NDM), Bruce Golding and the newly-elected president of the Jamaica Manu-facturers Association (JMA) Clarence Clarke, who were at the public hearing called for greater accountability and efficiency from the JPSCo, stressing that the quality of service does not match the public's expectations.
Mr. Golding further added that with a projected rate of return of 13.2 per cent, the JPSCo needed to let the public know just what the incremental increase figure will be as a result of its application being approved.
