Gov’t left in the dark
State reps on JPS board weren’t told of planned increase in electricity bill charges, says Vaz
Published:Thursday | August 22, 2024 | 12:11 AMKimone Francis/Senior Staff Reporter
Energy Minister Daryl Vaz says the three government representatives on the Jamaica Public Service Company (JPS) board were unaware of the planned increase in customers’ bills, which the power company attributed to an increase in fuel charge and exchange rate.
The Government maintains a 19.9 per cent stake in the JPS, which allows it to appoint three board members.
Vaz said he convened an emergency meeting on Tuesday with the three members – Danville Walker, Dennis Morgan, and Nadani Chung – to ascertain whether they were aware of the “rate hike” and was told that they had not been informed.
“… My three members attended no board meeting and were not contacted, and they were not contacted on the estimated bills either. I do find it very, very curious, and I think that answers and sanctions are deserved,” said Vaz.
He said that at the meeting, the Government’s position was put on the table for its three representatives to take back to the next JPS board meeting, scheduled for month end.
“I told them in no uncertain terms what the Government’s position was and the position they are to take at the board meeting,” he said.
The Government wants a “complete” rollback of the bill amounts, which the minister said does not compute with the concession.
“The big elephant in the room remains these unconscionable bills that were sent out in recent days. I can say to you that I am confident, based on the discussions that I have had with the president and his tone, that we are going to see definitively something in the next few days.
“The Government is strong and insistent that a complete rollback of the increases is the only thing that will make this Government and this ministry happy,” said Vaz.
He said that based on the $400 million special consumption tax (SCT) concession on automotive diesel oil (ADO) granted to the JPS, there should have been no more than a six per cent hike in electricity bills this month.
He disclosed the value of the concession yesterday during a press conference at the Ministry of Science, Energy, Telecommunications and Transport, amid the uproar over the high electricity bills.
The minister said the SCT waiver is $348,396,077.20 and the ad valorem extension is $48,004,678.61.
He said the ministry’s internal figures from its technical team, which included Petrojam, Jamaica’s sole oil refinery, confirmed that there should have been no more than the single-digit increase.
“[This] is based on the fact that the LNG (liquefied natural gas) was only out for five days,” Vaz said, confirming a Gleaner report on Wednesday.
The JPS said the recent increase is primarily due to a higher fuel charge, and to a much lesser extent, a higher billing exchange rate. The company noted that the billing exchange rate on bills moved from J$156.30:US$1 in July to J$157.53:US$1 in August.
The fuel charge moved from $24.335 per kilowatt to $32.172 per kilowatt, a 30 per cent increase.
The minister said that the JPS has questions to answer.
This is because the finance ministry granted a concessionary rate of $4.5611/litre on ADO, down from $44.90/litre, for July as the JPS had requested.
The JPS had previously informed the ministry that New Fortress, which supplies it with LNG, had advised that it would cease the supply of gas from its floating storage and regasification unit stationed offshore at Old Harbour ahead of the passage of Hurricane Beryl.
It said that resorting to the use of ADO to supply customers during the passage of the storm would mean an increase in fuel rate, which would further compound customers’ bills when GCT is applied.
“JPS is concerned that this pass-through cost will unnecessarily increase the burden on households and businesses as they struggle to recover from the hurricane and is an unintended consequence, a view we presume the Government shares,” the company told the finance ministry in a July 1 letter.
However, Vaz, like his appointed board members, said he was left in the dark as it relates to the exchange between the finance ministry and the JPS’ chief financial officer.
“I find it very curious that the letter was written on July 1, addressed to Nigel Clarke, under the signature of a Mr Vernon Douglas, the chief financial officer, and it is neither copied to his president, his board, the OUR (Office of Utilities Regulation), the permanent secretary, or the minister with responsibility for all. The only thing that I can think is that Mr Douglas is in charge of all of us. That’s the only conclusion,” said Vaz.