NWC applies to OUR for mid-tariff review
KINGSTON, Jamaica — The National Water Commission (NWC) has applied to the Office of Utilities Regulation (OUR) for a mid-tariff review.
OUR said in a news release Wednesday that the NWC submitted its application on June 30, 2016, but in a post submission meeting with the OUR, it indicated there was need to review aspects of its submission. A revised document was therefore sent to the OUR on August 17, 2016.
The utilities regulator said NWC is allowed to submit a mid-tariff application following a five-year Tariff Determination Notice issued by the OUR. The last such Determination Notice was issued in October 2013 for the 2013-2018 period.
The OUR has 60 days from the date of submission of the revised document to review the NWC’s mid-tariff application.
In its application, the NWC asked the OUR to:
1. Reduce the Efficiency Factor (X-Factor) to zero for the remainder of the tariff period. The X-Factor is currently set at 5.5 per cent.
The X-Factor represents the efficiency gains made by the NWC that are passed on to its customers by way of a rate reduction.
2. Reduce the deemed revenue, or collection rate target, to 87 per cent of billing for the remainder of the tariff period. The deemed revenue is currently set at 92 per cent.
3. Allow for a special increase in the Price Adjustment Mechanism (PAM) to assist in recovering financial losses experienced by NWC as a result of the extreme drought and other events that have affected NWC’s cost, over which it has no control.
4. Increase the K-Factor percentage from the current 14 per cent to 20 per cent, which it says would allow the NWC to service additional loans required to finance its non-Public Private Partnership capital works projects.
The K-Factor was established in the NWC’s 2008 Tariff Determination to provide the entity with funds to carry out capital projects intended to reduce non-revenue water, extend sewerage services, as well as to improve its existing sewerage treatment plants. Efforts to reduce non-revenue water include: repairing and/or replacing its current ageing and decaying infrastructure with a view to significantly reduce and over time, (possibly) eliminate leaks on its network.
