John Myers Jr., Staff Reporter
( Left - Right ) GEDDES AND MATTHEWS
A NEW twist has developed in the controversy surrounding efforts by
the Jamaica Public Service Company (JPS) to recover the cost of damage to its equipment as a result of Hurricane Ivan.
The light and power company announced yesterday that it had decided not to increase electricity rates to recover the $457 million approved by the Office of Utilities Regulation (OUR) for the hurricane damage one year ago.
At the same time, the OUR said the JPS's lawyers yesterday served notice on the agency
and the Minister of Commerce, Science and Technology, Phillip Paulwell, that it will be going to the Court of Appeal, apparently to have the approved amount increased.
JPS President and Chief Executive Officer, Charles Matthews, in a statement released yesterday, said: "We do not intend to recover these costs until such time that oil prices stabilise and the economy has rebounded from this shock."
According to Mr. Matthews, "with world oil prices causing unprecedented hardship, we know these are tough times for our customers". He added that this decision, "in deferring recovery is aimed at helping to cushion the impact of that trend."
But David Geddes, the OUR's director of consumer and public affairs, said the utilities regulator was concerned "whether JPS will be seeking to recover interest on the money that they have opted not to recover at this time and if that is the case the OUR will very likely not grant it".
He added, "We also have to take note of a few things, and one is that the JPS lawyers have served notice on us that they are exercising their right to appeal the decision ... so obviously they wish to recover more from consumers than the $457.5 million of their Hurricane Ivan damage."
Clive Mullings, the Opposition spokesman on utility and regulatory affairs, cautioned that "people must not be fooled into believing that they are not taking it (the increase)". He also raised concerns about the JPS wanting to collect interest on the recovery sum to defer implementing the increase at this time.
LESSER SUM APPROVED
The JPS had submitted a $1.5 billion insurance claim on the OUR as the cost of damage to its network, caused by the hurricane last September. But this was rejected by the OUR following a review of the claim, and instead approved a significantly lesser sum of $457.5 million, which the light and power company is to retrieve through the rate increase that was scheduled to take effect on October 1. The JPS subsequently voiced its disappointment with the amount and threatened to appeal the OUR's decision.
"Hurricane Ivan was our first experience in recovering from a totally unplanned and very costly event that was entirely out of our control," Mr. Matthews debated. "We're in uncharted waters and it is extremely important that JPS and its customers clearly understand the rules that will serve as the basis for future expectations," he emphasised.
He said the review process would provide an opportunity for the public to better understand the insurance issues affecting electric utilities across the Caribbean Basin.
