Consumers paid, on average, 30 per cent more for electricity during the three months ending June 30, 2011 than they did in the prior year.

Consequently, the island’s sole distributor of electricity Jamaica Public Service Company (JPS) pocketed 75 per cent more profit at its bottom line even though consumers could have possibly forked out more due to higher oil prices.

JPS posted US$10 million ($860 million) net profit for the three months to June 30, 2011 compared to US$5.7 million the year prior.

Bank of Jamaica (BOJ) data, which entails monthly electricity sales (in kilowatt-hours, kWh) up to May, showed total electricity sales in the month of April was 3.4 per cent below April 2010 while sales in May was down 1.6 per cent from year-earlier levels. Even if June 2011 sales were similar to June 2010 sales, sales for the three-month period would have been down by 1.7 per cent from the comparative period in 2010.

JPS in its recently published financial statements showed that revenue climbed by 27.6 per cent to US$301.8 million during the quarter under review. But lower sales volume meant that the average rate per kWh climbed from 29 US cents in the Jun 2010 quarter to 37 US cents per kWh during the review period, which was also up from the average rate of 35 US cents in the Mar 2011 quarter.

Incidentally, the cost of fuel that JPS incurred increased at a slower pace than world oil prices. JPS’s fuel bill increased by 34 per cent over the year to June 30, 2011 although OPEC basket reference prices showed a 44 per cent increase in the price of oil over the same period.

In a written response to Business Observer queries, JPS said the company “does not follow the trending of OPEC basket reference prices and as such would not be able to comment on the correlation of the movement in those prices and JPS’s fuel cost per kWh”.

It did say, however, that “the cost of fuel used by JPS would be dependent on the quantity of fuel purchased and the price at which it is invoiced. The quantity of fuel purchased is in turn driven by the efficiency with which JPS’ plants burn fuel”.

JPS purchases fuel from Petrojam, which prices fuel based on the US Gulf reference prices.

This month, JPS customers are expected to see a five per cent reduction in electricity bills as a result of “a drop in the Fuel & IPP Charge applied to the August bills”.

“The Fuel & IPP Charge on bills this month is $20.718 per kilowatt-hour, compared to a charge of $22.501 per kilowatt-hour applied to bills last month,” said a press statement issued yesterday by JPS. “The Fuel & IPP Charge on electricity bills is adjusted each month to reflect changes in the price of the oil purchased from Petrojam to generate electricity, as well as the variable costs paid to the Independent Power Producers who sell electricity to JPS. Most of this charge is for fuel. Of the $20.718 Fuel & IPP Charge per kilowatt-hour (kWh), $20.327 represents fuel costs, while $0.391 is the IPP Charge.”

Fuel cost aside, JPS saw its gross profit per kWh sold increase from US$0.08 in the end-June 2010 quarter to US$0.10 per kWh in the quarter under review.