Dear Editor,

JPS has noted with concern the article published on September 6 by Betty-Ann Blaine, “The ‘CURE’ for JPS”. There are a number of incorrect statements and we wish to clarify several errors.

(1) It is incorrect to suggest that Jamaica is the only country in the world where the customers help to repair the utility system in the aftermath of a natural disaster. In most regions within the Caribbean and Americas which are exposed to natural disasters, in particular hurricanes, it is standard practice for some form of regulatory assistance to be provided to rebuild the utility systems in the aftermath of major storms. This regulatory aid is almost always funded either directly or indirectly by the customers (since government aid is still an indirect cost to rate payers). There has been government assistance in the aftermath of hurricanes within the last five years to Florida, New Orleans, the Bahamas, Barbados and Cayman, just to name a few places.

(2) JPS has never been entitled to a guaranteed profit, and the amount of 17.5 per cent is not in any way relevant to the electricity sector. Only one telecoms utility in Jamaica was ever guaranteed a profit (which happened to be a 17.5 per cent return) and that regime ended in 1998, more than a decade ago. The profit JPS is making nowadays represents less than four per cent of the total cost of electricity. Our financials are published on the Jamaica Stock Exchange. The real culprit is the high cost of fuel which today represents about 65 per cent of the total cost of electricity.

(3) It is not true that JPS is switching off power in large geographical areas for any reason, outside of maintenance outages or emergency outages. JPS is in the business of selling electricity and has no interest in disconnecting any customer who is paying for their service.

(4) The simple objective of the loss reduction campaign is to reduce the theft of electricity and to encourage everyone to acquire the service legally. The more people we have consuming electricity legally, the lower the rate will be for all. We are certainly not targeting any segment of the population, and in fact we have stated publicly on several occasions that electricity theft spans the entire socio-economic spectrum of our society.

(5) On the matter of public concern with digital meters, we have opened our doors to two independent reviews and look forward to the findings soon. We would only highlight at this time that both the Bureau of Standards and the OUR have already explained how these meters are certified and tested.

Please note that JPS is working closely with the Government of Jamaica and the OUR, in an effort to reduce the cost of electricity significantly. Sadly, the problem we face today stems from bad decisions (or the lack of decisions) over several decades. While no one could have imagined in the year 2000 that the cost of oil would increase from US$20 per barrel to more than US$100 per barrel within eight years, Jamaica failed to reduce its almost total dependence on and exposure to oil over the past 30 years. Now that the price of oil has skyrocketed and has remained relatively high over the past four years, directly impacting the cost of electricity, it is absolutely incorrect and unfortunate to blame JPS for this problem.

JPS is committed to helping reduce the cost of energy in Jamaica within the constraints of the laws of the land. In this regard, we await the final response of the regulator and the government, so that a decision can be made as to how we (Jamaica) will move forward in our quest to significantly reduce the cost of energy. In this we are more than willing to have a heart-to-heart discussion with Ms Blaine.

Dan H Theoc

Chief Financial Officer

Jamaica Public Service Company

Kingston 5