JAMAICA PUBLIC Service Company (JPSCo) customers will start paying an average of nearly two per cent more for electricity starting today, according to the Office of Utilities Regulation (OUR).
The OUR explained that it had actually granted the light and power company a 3.1 per cent increase in its non-fuel rate but, balanced against fuel charge and devaluation increases already introduced since last year, the total increase, which becomes effective today, would work out at an average of 1.8 per cent of overall bills.
The OUR said it had rejected proposals from the JPSCo for a nine cent per kilowatt increase in the energy rate, which is not affected by changes in fuel prices, for Rate 40 and Rate 50 customers. Rate 40 customers are industrial users with premises ranging from large shops to small factories, while Rate 50 customers are the company's largest consumers, including major producers and large hotels. JPSCo said that this was needed to recover revenue losses attributable to a design defect in the Time Of Use (TOU) rate, an incentive to commercial users to use more electricity during off-peak periods.
The OUR said it also rejected a JPSCo proposal to keep the benefits of increased efficiency, by maintaining its heat rate targets at the existing level of 11,900 kilojoules per kilowatt hour (kJ/kWh), pending a full review in the 2004 rate filing. Insisting that the company pass on efficiency gains in its fuel conversion to its customers, the OUR determined that the system heat rate be reduced to 11,600 kJ/kWh. Heat rate is the measure of the efficiency with which fuel is converted into electricity and a lower value denotes greater efficiency.
According to the OUR, the JPSCo has already received a four per cent increase on the non-fuel rate since the last adjustment in April 2002, through the monthly foreign exchange (devaluation) adjustments.
"The JPSCo has also been given approval to introduce a uniform fuel rate across all rate classes as part of a comprehensive strategy of fuel price stability management," said the OUR in a statement. "However, the JPSCo will have to give due recognition to the necessary differentiation of fuel charges for customers on the Time Of Use rate."
The OUR reaffirmed its position that the JPSCo may establish the conditions under which customers qualify for the TOU rate. Such conditions must, however, be approved by the OUR and published by the JPSCo. Customers will have the right to appeal to the OUR if dissatisfied with the utility firm's action on a case-by-case basis.
In a reaction to the OUR's statement, the JPSCo noted that the final charge to customers in any given month will still be influenced by the price of fuel and the rate of exchange, that continue to show volatility, as well as energy consumption during the billing period.
The company was satisfied that the OUR had approved its request to move to a single fuel rate for all rate classes, except large commercial and industrial customers on the TOU option. The JPSCo said that the move to a single fuel rate was a further step to simplifying bills and to improving transparency in the rate structure for customers.
The new rates will run until May 2004, when a full cost and rate review is expected to be completed.
