J Paul Morgan, director-general of the Office of Utilities Regulation, speaking at yesterday's luncheon meeting of the Kiwanis Club of Kingston. (Photo: Bryan Cummings)

THE Jamaica Confederation of Trade Unions (JCTU) will today propose a limit above which the Jamaica Public Service Company (JPS) should not increase consumers' electricity bills, as union leaders struggle to hold onto the fragile memorandum of understanding they signed with the government four months ago.

Today's union meeting comes on the heels of yesterday's announcement by the Office of Utilities Regulation that electricity rates will go up by next week because of a rise in oil prices and will be reflected in next month's light bill.

"We are due to meet tomorrow to continue discussions and the points will include what level of increases one can regard as reasonable and what levels to regard as intolerable," JCTU President Dwight Nelson told the Observer yesterday.

At a meeting of the Kiwanis Club of Kingston at the Hilton Hotel yesterday, OUR Director-General J Paul Morgan said that the recent rapid increases in world fuel prices would push up the fuel charge portion of electricity bills by as much as 20 per cent. That is in addition to the maximum 18 per cent increase in non-fuel rates that the JPS had already requested. The OUR is expected is expected to make a decision on that request by Friday.

". The impact of the increase in the cost of fuel could make the impact of any decision taken in respect of the other part of the bill - the non-fuel charge - pale into insignificance," Morgan told Kiwanians. "The impact could be as high as 15 to 20 per cent on the fuel charge and we could now be at that point where the fuel charge would actually be higher than the energy charge."

The cost of fuel, he stressed, was beyond the control of the government and the utility company and he announced that the impact could be felt in "another week or so".

The rising fuel prices, plus JPS' previous request for an increase, would mean that the light and power company's customers would have to absorb two sets of increases in succession.

This is the source of the unions' concern, as they have already locked their members into a wage-freeze-for-jobs pact which means public sector workers will not receive any pay increases above three per cent over the next two years. In exchange, 15,000 jobs were saved.

But the agreement was predicated upon government's promise to keep inflation between eight and nine per cent in the first year and two to three per cent in the second year.
The unions had also expressed concern, from as far back as January, when discussions on the MOU were still underway, about rising utility and petrol costs.

Nelson had said then that the JCTU would make the finance minister, Dr Omar Davies, aware of these concerns.

But world fuel prices have spiralled over the last few weeks, prompting calls for a fare hike from some sections of the transport sector. As prices continue to inch up at the pumps, there are concerns that this will, in turn, shatter the MOU's inflation targets. Rising electricity prices, Nelson argued, would have a similar effect.

"Increases in electricity rates have a domino effect on society and a negative impact on reducing the inflation rate. It is something we in the trade union movement are concerned about," he said yesterday.

"Any increases would put tremendous pressure on the MOU, because it speaks to two things - a restraint of workers in the public sector and the objective to reduce cost of living index to single digits. Such significant increases on electricity rates would put a damper on the ability of workers to maintain the restraint," he said.

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