OUR announces operational audit for JPS
THE Office of Utilities Regulation (OUR) has announced plans to carry out an audit of the operations of Jamaica Public Service (JPS) ahead of the scheduled rate review in June and amid continued complaints of high electricity bills by customers.
In a press release yesterday, the regulatory body said that the audit will give it insight into operational weaknesses and strengths of the company's policies. The OUR said that it had signalled its intention to carry out the review in its "2013 annual rate adjustment decision". The light and power company's current five-year tariff price cap (2009 - 2014) comes to an end in June 2014.
"A management and operational audit is a diagnostic examination of how well an organisation is managed. Management and operational audits also offer the possibility of questioning in-depth the operating expense, capital costs, cost allocation and attribution, debt and asset management, financing policy, dividend policy and practice as well as other financial information submitted especially in the course of a rate review case," the OUR explained.
It said the objectives of the planned audit "are to provide extensive and objective insights into how the utility operates, highlight any adverse performance consequences of its current approaches and practices, and inform the OUR's analysis in the upcoming tariff review".
"To this end, the audit will examine practices and processes in such areas as: corporate governance, operations management, financial management, debt and asset management, human resources, and to the extent that they exist, related party transactions," the OUR said.
"It is also proposed to evaluate the extent to which the acquisition, management, deployment and financing of resources are done efficiently and the degree to which there are opportunities for fundamental improvement in the business of the company which will benefit the rate payers," the OUR added.
The regulatory body said it had begun, through advertisements, "inviting expressions of interest for a qualified, experienced and competent Auditor to undertake the audit".
"Bidding for the Consulting Services will be conducted through an international competitive bidding process and is opened to all qualified bidders," it added.
The JPS is the sole distributor of electricity in Jamaica. Japan-based Marubeni Corporation and South-Korea-based Korea East-West Power — through a joint partnership — have majority shares of 80 per cent (40 per cent each) in the company, with the Government of Jamaica (19.9 per cent) and some 3,000 individuals (0.1 per cent) owning the remaining shares.