KINGSTON, Jamaica. September 15, 2021. Opposition Spokesman on Mining and Energy, Phillip Paulwell, has called on government to use its influence to stop the increase in electricity rates.
In a statement today, Paulwell said the new electricity tariff announced by the Office of Utilities Regulations (OUR) will cause hardship to domestic users, decrease business competitiveness, and force more illegal connections on the national grid.
Paulwell who is Member of Parliament for Eastern Kingston, said “A one to two per cent increase granted by the OUR was unwarranted as most consumers are already experiencing an increase in their monthly bills due to staying at home more, increases in fuel prices, and IPP charges.” The JPS is not losing money and has continued to gouge consumers throughout COVID-19 pandemic.
Paulwell shared that matters have been made worse as citizens have had to utilize more power for work from home, online classes, and domestic appliances. “The government must, therefore, consider this pandemic related consumption as a reason to ease the pressure on consumers. I am suggesting that we instead freeze electricity prices at current levels pending completion of the review”, he said.
Consequently, the Opposition is calling on the Government and the OUR to put the new rates on hold, pending a further review and clarification of several issues raised by the OUR in its decision.
Specifically, Paulwell referenced the OUR decision in its view that the JPS Heat Rate target for the tariff application was not in line with optimal economic generation dispatch. As a result, it adjusted the target. He said this raises serious questions, as the Heat Rate is used to determine efficiency levels in electricity generation.
Mr Paulwell also raised the issue of the System Losses target, which the OUR did not approve. He said Jamaicans could not afford the 23.8% losses target specified in the 2019-2014 Rate Review JPS Determination Notice. Action must, therefore, be taken to reduce the system losses, including electricity theft. “As a reminder, it was this Government which discontinued the electricity theft reduction programme”, Paulwell said.
The Opposition Spokesman said while he was aware that the existing JPS license provided for periodic rate reviews by the OUR, increases are not automatic, and applications must be subject to rigorous examination.
These two points raised by the OUR lead to concern about the company’s efficiency in power generation and distribution.
The government must explain why although most of Jamaica’s electricity is now generated using LNG, prices have moved from US 22 cents per kilowatt-hour to almost US 30 cents in five years. “Instead of benefitting from savings in the conversion from diesel fuel to LNG, it had instead combined with other company and national factors to drive electricity prices in one direction,” he said.
The Opposition warned that consumer patience was waning on energy prices as they have seen no positive results from either technology improvement or conservation efforts.