JPS says customers will see ‘modest reduction’ in bills this month

Jamaica Public Service Company (JPS) late yesterday said that customers will see a modest reduction in the fuel and IPP charge on their bills this month as a result of lower oil prices.

The electricity provider’s announcement came hours after the Office of Utilities Regulation (OUR) revealed that it is investigating complaints by JPS customers about receiving high electricity bills since March.

According to the OUR, customers have been complaining that they have seen drastic spikes in their bills even though they did not increase consumption, or where there was an acknowledgement of increased consumption, customers feel the level of increase is too high.

The OUR said it has been receiving complaints via its social media pages and through direct contacts with its Consumer Affairs Unit by calls, letters and e-mails. The regulator also said it has “noted complaints posted on JPS’s social media pages”.

In its release yesterday, JPS said the fuel and IPP charge on bills this month is $23.40 for each kilowatt hour (kWh) used, compared to $24.20 per kWh in May.

The fuel and IPP charge covers the cost of the fuel required to produce and deliver each kWh of electricity, and some of the costs of the power JPS buys from independent power producers (IPP).

According to JPS, customers are benefiting from reductions in the price of oil on the world market, which has been reflected in the lower price of the oil bought from Petrojam. “However, oil is used to produce less than one-third of the electricity sold to customers. Most of the electricity generated comes from Liquefied Natural Gas (LNG). This means that the bulk of the fuel charge on bills is for LNG, which has not seen price reductions,” JPS said.

The company said the fuel charge on bills reflects the actual cost of the fuel that it uses to produce electricity. It also said the amount it pays for fuel is directly included in customers’ monthly bills, without a mark-up or profit to JPS.

Additionally, JPS said the movement of the Jamaican dollar, relative to the US dollar, is one of the main reasons for unpredictable electricity bills.

“Unfortunately, the value of the Jamaican dollar has been sliding in recent times and this has caused increases in bills over the past few months,” the company said.

It also reiterated that it cannot change electricity rates until the OUR does a rate review, and pointed out that the last comprehensive rate review was done in 2014.

“The electricity bill is made up of two main parts: The fuel and IPP charge and the energy charge. The fuel and IPP charge will change each month depending on the actual cost of fuel to JPS and other producers of electricity. These charges are transparently calculated and audited by the OUR. The energy charges on bills are set by the OUR,” JPS explained.

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