JPS seeks US$26m from Electricity Disaster Fund for hurricane damage

Light and power provider, the Jamaica Public Service Company (JPS), has applied to the Office of Utilities Regulation (OUR) to withdraw US$26 million from the Electricity Disaster Fund (EDF) to shore up repairs required as a result of Hurricane Beryl which impacted the island in July.

In turn, the OUR, which maintains management of the EDF, is contemplating whether to increase customers’ contribution, which currently stands at J$19 per month for customers using a minimum of 150kWh monthly.

This comes despite an assurance given in July that customers would not face additional charges to support the JPS’s post-hurricane restoration efforts.

During a webinar on Friday, titled ‘The Electricity Disaster Fund - A Shelter in the Storm’, Dr Cedric Wilson, OUR deputy director general with responsibility for water, electricity and sewage, explained that JPS’s transmission and distribution (T&D) assets now stand at around US$522 million.

The ideal amount to have in the EDF is 15 per cent of the T&D assets, or around US$78 million to US$80 million, he added. The current rate of 11 per cent sees the EDF at US$56 million.

“To get to that 15 per cent, it would be approximately US$78 million to US$80 million, so that would be the comfort level that we would have for the fund,” Wilson said.

“It might be necessary for us to make some effort to get to that level, and in that process, which we will have to look at as the regulator, and to consider whether it might be reasonable to increase the level of inflows into the fund and how much that increase ought to be,” he added.

“Like in the case of insurance, where premiums tend to go up in the millions in the aftermath of a hurricane, there might be consideration of increasing the inflow from $2 million to a higher-than-ever (level) to ensure that we might not be out of pocket if there is an event next year, God forbid, or very shortly after,” the deputy director general explained further.

The current charge of J$19 for customers consuming a minimum of 150kWh of electricity per month pumps approximately US$2 million into the EDF on a monthly basis.

On July 17, nearly two weeks after Hurricane Beryl impacted Jamaica, The Gleaner reported that customers were not expected to pay additional charges for extensive damage to the JPS infrastructure following the passage of the hurricane, given that the company had access to up to US$50 million from the fund.

The report stated that an assessment by the company had revealed damage to 94 transmissions structures, 2,602 light poles, 4,287 conductors, 137 transformers, and 2,185 other transmission and distribution equipment.

The EDF was established in 2004 as part of a tariff structure to determine rates which may be charged in respect of the provision of electricity service, and to protect the interest of consumers in relation to the supply of electricity service, in accordance with the OUR Act.

The objective of the EDF, according to the OUR’s website, are to, among other things, reduce the uncertainty with respect to the funding of restoration activities in the event of a natural disaster, and to minimise the financial impact on consumers, since they might be required to pay higher rates in the aftermath of a natural disaster.

It states that the capacity of the sector to recover quickly after a disaster is critical to the resilience and long-term stability of the economy.

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