JAMAICA Public Service Company (JPS) customers will, this July, see some reductions in their electricity costs even as the company has agreed to make changes to its disconnection policy, which will give persons a one-month grace period to pay up before disconnection.
Making the announcement in Parliament yesterday, Energy Minister Phillip Paulwell said following negotiations with JPS, the company had agreed to take three steps to "bring some amount of relief to their customers".
"The first is a reduction in electricity rates. The Government has heard the cries of the business community, and we agree that the high rate of electricity is prohibitive to growth, and that those rates make our manufacturing and productive sectors uncompetitive regionally and globally. In this regard, we approached the JPS for their assistance in finding a way to get the energy costs for commercial and industrial consumers down as quickly as possible. They have worked with us in creating a volume discount intended to spur economic development," Paulwell said.
As it stands, the JPS has agreed to apply a "wholesale rate" to the top 20 per cent of industrial customers which represents a 25 per cent discount on the non-fuel tariff. In addition, the light and power company has agreed to adjust the time of use (TOU) discount they offer commercial and industrial consumers, for their off-peak usage.
"These measures will greatly ease the burden on the production and manufacturing sectors," Paulwell said, adding that smaller and residential consumers will also come away with some benefits as well.
In this regard, the JPS has agreed to offer a $250 discount as an incentive to customers who pay their bills in full before the due date. In a change to its disconnection policy, "it will no longer automatically disconnect consumers who miss their payment date by a day or a week".
"As minister, I get daily complaints about the JPS' existing policy, which does not offer any measure of flexibility to paying customers, particularly to the poorest who struggle with cash flow throughout the month. No longer will the JPS automatically disconnect consumers who miss their payment date by a day or a week. Instead, those customers will face a late payment fine of $250, and will only be eligible for disconnection if they are in arrears for over one month," Paulwell told the House.
In the meantime, he said the JPS is currently working on seven new systems that will allow the utility to offer a variety of improvements in its billing and collections and customer service in general.
Minister Paulwell said one of these systems, which will allow for prepaid electricity service, is already being tested in a pilot project.
"Given our experience in the telecoms sector, I anticipate that on national rollout, it will be a resounding success. These steps represent a monumental shift in the way that our electricity sector operates, and I commend the JPS for working with the Government to deliver these improvements to the Jamaican consumers, both residential and industrial. We anticipate that the majority of these measures will be endorsed by the Office of Utilities Regulation in short order, and expect to have them implemented by July 1, 2013," the energy minister said.
Yesterday, Opposition spokesman on energy Gregory Mair said the discount was appreciated but urged the Government to do more.
"I welcome the announcement... however it's 25 per cent of the non-fuel tariff, which is about 40 per cent of the bill, so truly they are going to see about a 10 per cent reduction in their bills, anything they can get is welcome, although I think they need much more support in order to be competitive," Mair said.
He, in the meantime, congratulated JPS on the new disconnection policy, even while questioning the Government's certainty that persons were in fact conserving more.
Paulwell responded: "We have proof and we are tracking the data that within the wider society and indeed the Government -- where we are six months into our conservation project -- we are seeing discernibly lower utilisation of electricity, we are seeing actual conservation taking place. Of course, it is as a result of the higher price, but also because of advocacy."
Paulwell, in responding to suggestions from the Opposition's Karl Samuda that the Government give additional focus to making special provisions to industrial companies engaged in export production because of the impact of energy costs on the export sector, said the discussions continue.
"The companies which will benefit now are the largest users, it spans the industrial, manufacturing and the services sectors and indeed the Government because the National Water Commission will benefit from this because they are very high up there, but we are in further negotiations regarding the export sector to facilitate those who might not be in the top 20 per cent," Paulwell said.