Corporate headquarters of Jamaica Public Service Company Limited, Knutsford Boulevard, New Kingston. - File

Monopoly power distributor Jamaica Public Service Company Limited is pouring billions of dollars and hundreds of its workers into a new effort to claw back the 23 per cent of its electricity that it loses between generation and transmission.

The company has put together a 'loss control unit', headed by vice-president Sangeet Dutta, to lead the effort, representing an investment of close to $6 billion.

But the bulk of the loss-control budget will be spent on transforming JPS' meter-reading system whose price tag was initially estimated at US$350 per customer, but which company officials now quote as US$460 to US$500 per customer.

J$27 billion price tag

Assuming blanket coverage, the programme could emerge with a price tag of US$277 million to US$301 million, or J$24.8 billion to J$27 billion.

JPS has a customer base of 602,500 with 525,000 categorised as residential, 70,000 small- to medium-size commercial, and 7,500 large commercial clients.

While no time table for full roll-out of the new meter-reading system was given - JPS officials saying only that the system is one now used in developed countries - the new charge outlined by the company cannot be fully financed from the five-year US$225 million or J$20 billion capital development programme the company disclosed last month.

The plan, however, appears to be part of the new loss control efforts, which have resulted in the establishment of an entire division dedicated to that purpose.

The JPS, having failed to achieve a system-loss reduction target in 15 years, said it is spending US$65 million or J$5.8 billion to set up the new division - funds already budgeted for under the US$225 million spending plan.

Control losses

"Our prime objective for 2010 is to revamp our activities to control losses and that is why the loss control division has been created and we have dedicated 275 persons who will be focused on the reduction of losses," Dutta told the Wednesday Business.

The 23 per cent loss that the company claims would last year have represented an opportunity cost of $18 billion in revenue, by Wednesday Business estimates, based on the company's earnings, which topped US$988.2 million - then the equivalent of J$79.5 billion.

The loss control unit's 275 members will separately be engaged in policing and educating communities to eradicate illegal connections; assessing the distribution network to plug its weaknesses; and implement the smart-meter programme to more effectively capture electricity usage.

"We have a five-year plan which begins in 2010, when we expect to reduce our system loss, by 2.03 per cent," said Dutta.

"In 2011 we should be able to reduce the loss by 2.17 per cent (and) will reduce by at least one per cent thereafter."

Ten per cent of the energy lost is referred to as technical loss, resulting from the company's own distribution system.

The larger part, however, some 13 per cent, is lost to electricity theft.

The latter will be receiving the brunt of the loss-control division's attention, said Dutta, who has worked with power companies in the Dominican Republic, India and Ukraine.

Auditing all JPS customers

In addition to policing the new smart meters, members of the unit will also be auditing all JPS customers.

"We are targeting everybody, from the richest to the poorest in Jamaica," said Mark Blair, director of technical audit and control at the JPS.

"Electricity theft is widespread and is being committed by individuals from every sphere of society. The only difference is that it is more sophisticated among higher income earners."

Still, the company has begun in the areas most notorious for illicit connections.

Dutta said the loss-reduction programme has been impacted by the decision of utilities watchdog, the Office of the Utilities Regulation, to grant a three per cent base rate increase to the light and power company, effective October 2009, rejecting the firm's application for the 23 per cent hike.

"What is wrong with this three per cent increase is that the return on this project will be much longer. If we had gotten more, you would see a quicker return," the JPS vice president said.

"It has not reduced our possibility of investment by one per cent. I must tell you it has increased. We cannot stop doing this, because in the future the country would suffer."

mark.titus@gleanerjm.com

Left: Sanjeet Dutta, vice-president of loss control, Jamaica Public Service Company Limited. Right: Mark Blair, director of technical audit and control, Jamaica Public Service Company Limited.

Role of loss-control unit

Monitor and control anti-theft network.

Man the Automatic Metering Infrastructure (AMI), which allows JPS to remotely disconnect and reconnect from a central location, instead of going to properties. Reconnections can be done within five to 10 seconds of payment verification.

A strike force team to search out and destroy all illegal connections, with or without the assistance of the police.

Analysing the usage pattern of the customer, looking for and investigating any dramatic changes.