Klao Bell, Staff ReporterThe Office of Utilities Regulation (OUR) is not convinced that the Jamaica Public Service Company (JPSCo) is providing a service of the highest quality.
And even though the OUR approved an overall 9.8 per cent increase in electricity rates, effective February 1, it is not satisfied that the utility company is making significant efforts to run a more efficient operation.
An OUR fact sheet on the recommended rates for electricity services states that "consumers must be provided with services which are of the highest quality economically attainable." But Winston Hay, Director-General of the OUR, finds that JPSCo comes up short in this area.
"They are definitely not providing optimal service, though some progress has been made, they are still a long way off. The obvious area of inefficiency is the losses through illegal connections...they have not done anything different in the last five years," Mr. Hay noted in an interview with The Sunday Gleaner last week.
Some suggestions put forward by the OUR to decrease the incidence of illegal connections have not been pursued. Mr. Hay said the JPSCo was advised to use insulated electrical wires that would eliminate the common problem caused by "throw-ups," (throw-ups are electrical wires tossed unto JPSCo lines, then used to conduct electricity to houses).
"It's obvious that people make direct attachments to the wires. One easy measure would be to use insulated wires. Though they're expensive, it would have long-term effects...I have not seen where JPSCo has looked into this possibility," Mr. Hay said.
But the JPSCo told The Sunday Gleaner that insulated wires are, in fact, used. However, it said, people get around that by cutting the wires and dropping them onto the ground.
The role of the OUR is paradoxical though, as according to the fact sheet, the decision to approve the rate is also guided by the need of the utility "to receive the level of revenues necessary for the efficient provision of the appropriate quality of service."
So, despite JPSCo's inefficiency, rate increases had to be granted to prevent the company from going under, and to prevent the Government from pumping more money to service that company's debts. That, says Mr. Hay, would be unfair to the public who would pay twice for JPSCo's inefficiency.
"Had the increase not been granted, the company would not have the financial resources to continue...the Government would have to come in and finance their operations. This wouldn't be fair as there are other things that the Govern-ment should be doing," he said.
Meanwhile, OUR did not grant everything on the JPSCo wish list. Apart from granting an increase of 1.6 per cent less than the average of 9 per cent requested by JPSCo, the OUR also made adjustments to the company's proposal. Two examples recalled by Mr. Hay are local and overseas travelling expenses.
"There were expenses that we considered to be higher than necessary, for example, overseas travel and transportation costs; staff has been cut by 20 per cent or more but the transportation costs were not reducing," Mr. Hay noted.
He could not say if Jamaican consumers have seen the last rate increase for now, as the role of the OUR is not to prevent the utility from asking, but to ensure that when they do, their submission is carefully reviewed.
"If JPSCo makes submissions, we will review them. There is nothing to stop them from making a submission," he said.
JPSCo said any increases in rates over the next three years "will be indexed to annual U.S. and Jamaican inflation, and so the rates will be dependent on these economic variables".
