OUR tells JPS no

OUR tells JPS no

Regulator rejects power company's 2019-24 rate review application

Saturday, August 17, 2019

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The Office of Utilities Regulation (OUR) said it has rejected a tariff review application from the Jamaica Public Service Company (JPS), citing material deficiencies including the absence of critical information and supporting documentation.

A news release from the regulator said it had informed JPS of the decision in a letter yesterday.

The regulator explained that under the company's electricity licence 2016, it (the OUR) had 10 working days — to August 16, 2019 — to conduct its preliminary examination and inform JPS as to whether it would accept or reject the application.

“Following a preliminary assessment of the submission on August 15, the OUR's technical team concluded that it was deficient and would not allow for a comprehensive evaluation of the application,” the regulator said.

The OUR also explained that its rejection of the application “is pursuant to Schedule 3, paragraph 7 of the Electricity Licence, 2016, which states inter alia, that 'If the office determines that the filing is deficient it shall reject such filing within the said 10 working days and shall notify the licensee clearly identifying the deficiencies'”.

The JPS had applied to the OUR for a rate review on July 31.

If the application was approved, it would have resulted in an average increase of 3.2 per cent in overall monthly bills to customers by early next year.

The percentage change could be lower or higher depending on the customer category, JPS said at the time.

According to JPS, it needed the rate increase to recover costs related to its investments in infrastructure, renewable energy support, and new technology.

“We're making significant investments in our infrastructure and systems every year to maintain, upgrade and ensure the safety and reliability of the equipment that serve our customers every day. This investment will go into upgrading transmission and distribution lines, replacing thousands of poles, replacing all street lights with Smart LED street lights, improving and renewing our fleet of generators and modernising the grid to improve reliability while enabling it to accommodate more renewable energy sources in the future,” president and CEO of the light and power company Emanuel DaRosa said.

“We're also investing in digital technology, such as smart meters and mobile applications, that will not only empower our customers, but also make it easier for them to do business with us. All of these investments will allow us to meet our customers' energy needs, maintain the reliable and efficient service they expect, and keep the electric infrastructure safe,” he said at the time.

DaRosa said JPS's rates are cost-based and aligned with the actual cost of providing the services, while supporting the opportunity for shareholders to earn a fair return on their investment and enabling the company to continue investing in modernising the grid and making it more reliable.

“As we make decisions about how and where to invest across the company, our customers are our primary focus. We take our responsibility to provide safe, reliable energy at an affordable price very seriously, and we work hard to manage our costs and identify ways to best serve our customers while keeping energy prices as low as possible,” he stated.

The company said its infrastructure plan, which speaks to distributed generation, the use of electric vehicles, and improved operational efficiencies, is aligned with the Government's National Energy Policy.

Some JPS customers saw increases in their electricity bills last October after the OUR approved an extraordinary rate review application which saw a 2.8 per cent average increase in non-fuel tariff and a 0.4 per cent average increase in the overall tariff. The review was sought under the new electricity licence of 2016 which, in addition to annual reviews, also makes provision for extraordinary reviews due to exceptional circumstances that have a significant impact on the electricity sector and/or JPS, the OUR said at the time.

Yesterday, the OUR said that as a result of the rate application rejection, the public consultations on the JPS tariff proposal, scheduled for August 20-September 4, have been postponed until further notice.

The OUR explained that JPS may resubmit its application when the identified deficiencies [and] any items requiring further clarification or additional information have been rectified and/or addressed.

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