Electricity rates going up by an average 1.4%Wednesday, September 15, 2021
BY DURRANT PATE
Electricity rates are going up by an average of 1.4%, as the Office of Utilities Regulation (OUR) has approved a new rate schedule for Jamaica Public Service (JPS), Jamaica's light and power company.
The OUR has arbitrated on the 2021 annual Rate Review Application submitted by the JPS on May 5 this year and shunned its requested average 3.5% increase. The OUR today announced its decision of a 1.4% average increase instead, which is to take effect September 1 and be reflected on customers' October bills.
The table below shows the major decisions by the OUR, compared to the requests made by JPS.
The OUR has approved the non-fuel pre-paid rates as follows:
Rate 10 Customers
- J$13.85/kWh for the first 117kWh within a thirty (30)-day consumption cycle
- J$21.03/kWh for each additional kWh thereafter within that thirty (30)-day consumption cycle
Rate 20 Customers
- First 10kWh - J$122.45/kWh
- Each additional kWh - J$9.03/kWh
The Independent Power Providers (IPP) rate for both Rates 10 and 20 customers is to be displayed as a separate line item on customers' utility bills.
The OUR, in its determination of JPS's rate application, held the view that the light and power company's proposed Heat Rate target of 9,927 kJ/kWh for the 2021-2022 rate adjustment period was not in line with optimal economic generation dispatch. Consequently, the utilities regulator has adjudged that the 2021-2022 Heat Rate target of 9,667 kJ/kWh, which was established in the 2019-2024 Rate Review JPS Determination Notice be maintained for the next rate adjustment period.
In addition, JPS's proposal for the revision of the OUR's determined 2021 System Losses targets was not approved. In this regard, the overall System Losses target of 23.8% specified in the 2019-2024 Rate Review JPS Determination Notice is applicable for the 2021 period.
Other decisions taken by the OUR on the rate applicaton are:
1. A determination that there is a net over-recovery balance (including WACC) of J$297.1m owed by JPS to its customers with respect to the decisions in the 2018 Annual & Extraordinary Rate Review Determination Notice arising from the lapse of time between that decision and the implementation of the 2019-2024 Rate Review Determination Notice issued by the OUR in 2020 December. JPS is therefore required to apply a reduction of J$0.113 per kWh to its average non-fuel tariff over an estimated 10-month billing period to effect this repayment.
2. The revision of Time of Use (TOU) rates for Rate 10 (residential) and Rate 20 (small commercial) customers. The revision minimizes the risk of revenue losses to JPS. The company is required to roll out its TOU programme over the next six months and engage customers in a public education programme.
3. The maintenance of the relationship between the energy rates for electric vehicles at public charging facilities at Rate 10 TOU rates plus 5%. This decision was first made in the 2019-2024 JPS Rate Review Determination Notice.
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