THE JAMAICA Public Service Company (JPS) has presented to the Office of Utilities Regulation (OUR) a demand for a $1.8 billion in reimbursement for damage to its transmission system and other assets caused by Hurricane Ivan. The OUR approved only a minuscule $457 million, about seven cents per kilowatt. To have accepted this amount in settlement of the claim would have prevented JPS from appealing the award to the courts so, making a virtue of necessity, the Mirant-owned light and power company has launched a clever public relations campaign in which customers are advised that the approved increases to their bills are being deferred until world oil prices stabilise.
In the meantime, however, the company is taking the issue of compensation to the Court of Appeal, asking for a complete review of the OUR's decision. If this appeal is successful, JPS customers would see a much larger increase in their bills, some of it perhaps retroactive and subject to interest charges from the date of the appeal to a final court decision. The case could go to the Privy Council in England and while all of this is taking place the suspended rate increase, large or small, will hang like the sword of Damocles over the heads of JPS customers.
Short of repurchasing Mirant's holding in JPS we are not sure what steps the Government can take to mitigate what appear to be stalling tactics. JPS is entitled to exhaust its legal rights under the terms of a contract that is turning out to be very one-sided. Ironically, as a sovereign nation, Jamaica may have more power to repurchase JPS than unilaterally to amend the terms of the operating contract. We are not advocating repurchase but Government must find a way of mitigating increases in electricity charges to Jamaicans, and it must give the OUR power to put an end to the current uncertainty which surrounds how much customers of JPS will be called upon to pay.
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