In a media release issued May 19th, the Office of Utilities Regulation (OUR) announced that the Jamaica Public Service Company has made a submission for its annual tariff adjustment for 2016. Below are 5 facts released by the OUR about JPS’ latest submission:
- The request for tariff review was made on May 4, 2016. The OUR will review and issue a decision on the submission by July 3, 2016 (within 60 days).
- The Government of Jamaica issued a new Electricity Licence to JPS on January 27, 2016. This tariff adjustment will be the first under the provisions of the new Licence.
- According to the OUR, this new licence includes provisions for fundamental changes to JPS’ regulatory framework, such as allowing for a shift from a price cap regime to a revenue cap regime. Under the previous price cap structure, real prices charged by the JPS were capped (subject to adjustment for inflation and productivity factors). With the new revenue cap regime, the real price of electricity will be allowed to fluctuate so as to facilitate the meeting of JPS’ revenue targets.
- JPS’ submission requests an increased annual revenue target of J$45.07 billion. This is an 9.53% increase over the base year target of J$40.6 billion.
- The adjustment would call for the following changes, made possible through provisions in the new license:
- The application of interest to past due bills for commercial and Government of Jamaica customers
- The addition of a surcharge that factors in foreign exchange rates, interest rates, and revenue movements to the revenue requirement. JPS proposes a J$526.6 million surcharge for foreign exchange and interest rates. The adjustment also calls for the inclusion of income paid/earned and total net interest expense in the revenue requirement. Other changes include, a provision for adjusting the revenue requirement in the case of foreign exchange loss in respect to working capital and debt servicing.
- Adjustments to 2014/2015 approved prepaid rates charged to Residential Rate 10 and Commercial Rate 20 customers.
Read the full media release here, Media Release JPS OUR.
The full submission made by JPS to the OUR is available here.