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Questions are being raised about the length of time the Jamaica Public Service (JPS) has relied on automotive diesel (ADO) as fuel, which the company says led to a significant spike in customers’ bills following the passage of Hurricane Beryl.
The power company applied to the Ministry of Finance for and received a reduction in the July special excise tax on ADO electricity generation due to the shutdown of the New Fortress liquefied natural gas (LNG) plant in anticipation of the storm.
but The Gleaners Sources confirmed yesterday that the plant was idle for five days between July 1 and 6, which would not result in JPS continuing to rely on ADO that month. The Gleaners It was also informed that JPS resumed using LNG at 9 pm on July 6.
Multiple attempts The Gleaners We reached out to JPS’s director of corporate communications, Winsome Callum, and the company’s media and public relations manager, Audrey Williams, for clarification, but were unsuccessful.
One month exemption
Yesterday, Finance Minister Dr Nigel Clarke noted that despite the one-month exemption granted by Treasury, JPS’s reliance on ADO was not expected to last long.
“The government does not know how long the JPS will need to rely on ADO. It is reasonable to expect that LNG supplies will be restored shortly after Hurricane Beryl passes,” Clark told The Gleaners.
He declined to comment further.
On July 12, the Ministry of Finance informed JPS that it would allow it to implement a preferential price for that month, from US$44.90 per liter to US$4.5611 per liter, as requested by JPS.
The Union Public Service Department had earlier informed the ministry in a letter dated July 1 that New Fortress had proposed to stop supplying gas from its floating storage and regasification unit offshore Old Port ahead of the passage of Cyclone Beryl.
Furthermore, the JPS noted that using ADO to generate electricity would have a “significant” impact on tariffs for two reasons.
The company said ADO prices are significantly higher than LNG and the SCT applicable to ADO has been significantly higher since November 2021 (from $4.5611/L to $44.90/L).
“The increase in fuel costs due to these two factors will further increase consumers’ bills when general excise taxes are applied. JPS is concerned that this pass-through cost will unnecessarily burden households and businesses as they struggle to recover from the cyclone, an unintended consequence, and we presume that the government shares this view,” the letter to the Ministry of Finance reads.
Unclear billing terms
However, it remains unclear how many days JPS relied on ADO and when it switched back to LNG, and whether it charged customers accordingly.
The company said the use of ADO and exchange rates led to the increase in bills.
The company said the fuel charge customers see on their bills is largely influenced by the actual cost of purchasing the fuel used to generate electricity during the period.
“In order to prevent damage caused by the hurricane, LNG supplier New Fortress Energy had to shut down gas facilities ahead of the hurricane to protect them from damage. Power plants that rely on LNG switched from LNG to a much more expensive fuel – automotive diesel to generate electricity within a few days, resulting in increased associated costs, which were reflected in customers’ bills,” JPS said yesterday, without specifying the number of days.
also, The Gleaners It is understood that the SCT charges are levied at the end of the month based on fuel usage.
The company is in trouble due to increasing complaints regarding bills for the July-August period.
The Office of Utility Regulation (OUR) confirmed yesterday that it received 131 complaints about bill disputes/suspicious bills between July 1 and August 19.
From January to June this year, OUR received a total of 264 complaints. In 2023, OUR received about 649 complaints, while in 2022, OUR received a total of 1,361 complaints. In 2021, OUR received a total of 1,483 complaints, and in 2020, OUR received a total of 1,637 complaints.
Energy Secretary Daryl Vaz is expected to discuss these issues and describe OUR’s regulatory efforts following the passage of Beryl’s bill at a press conference today.
Following widespread protests over a sharp increase in electricity tariffs, the Energy Department has set up a dedicated email address to receive complaints about the latest electricity rates.
The ministry said the email addresses will “streamline the process of receiving and resolving complaints”.
The commission says JPS customers who feel their bills have been unfairly affected should submit complaints about their energy supplier to: jpscomplaints@mset.gov.jm and concerns about OUR ourcomplaints@mset.gov.jm.
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