Mark Titus, Business Reporter

A surcharge on electricity bills to pay for damage suffered by the light and power company from Hurricane Ivan in 2004 will come to an end this month, offering some measure of relief to the near 600,000 customers of monopoly power distributor, Jamaica Public Service Company (JPS).

Future hurricane losses are expected to be met from the JPS's self-insurance fund, which is now said to be capitalised at around US$9 million, or more than J$800 million at current exchange rates.

"This month will be the last of such charges," David Geddes, director of consumer and public affairs at the Office of Utilities Regulation (OUR) confirmed.

"There will be no more hurricane charges after this."

JPS officials did not immediately respond to an invitation for comment. However, the company was expected to recover some $458 million over two years.

The OUR authorised the JPS to recover the cost of damage caused by Ivan through a charge of about seven cents per kwh for residential clients, applied to customers' bills between 2007 and 2009.

JPS chief executive officer Damien Obiglio said in April that the charge represented less than one per cent of each customer's bill.

The charge varied monthly, but at average consumption of 240 kWh, customers would pay around $17 on the average bill.

The JPS had no insurance on its transmission and distribution assets, but this situation was not unusual or peculiar to Jamaica, as insurers worldwide are unwilling to cover utilities operating in hurricane belts.

The are considered too high risk because of the frequency and intensity of storms.

The JPS had the option of covering the hurricane-inflicted cost from a self-insurance fund, but the power provider maintained at the time that the amount in the fund was inadequate to foot the recovery bill.

The fund, which JPS officials confirmed earlier this year to be now in the region of US$9 million, and growing by about US$5 million per year, was utilised to cover damage caused by other storms, including Hurricane Dean, two years ago.

ark.titus@gleanerjm.com