Vaz suggests JPS didn't fully pass on benefit of $400m fuel tax concession to customers

Energy Minister Daryl Vaz says based on the $400 million special consumption tax (SCT) concession on automotive diesel oil (ADO) granted to the Jamaica Public Service Company (JPS), there should have been no more than a six per cent hike in electricity bills this month.

Vaz disclosed the value of the concession on Wednesday morning at a press conference at the Ministry of Science, Energy, Telecommunications and Transport (MSETT), amid the uproar over the high electricity bills.

Vaz 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 a six per cent hike in electricity bills.

“[This] is based on the fact that the LNG (liquefied natural gas) was only out for five days,” Vaz said.

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$156.30:$US1 in July, to J$157.53:US$1 in August.

The fuel charge moved from $24.335 per kilowatt to $32.172 per kilowatt.

Questions have been raised about the length of time JPS relied on ADO for fuel, which it said caused the dramatic spike in customers' bills following the passage of Hurricane Beryl.

The power company requested and received a waiver of the special consumption tax on ADO for electricity generation from the Ministry of Finance for the month of July after New Fortress' LNG plant was shut down in anticipation of the storm.

But Gleaner sources confirmed yesterday that the plant was inactive for five days between July 1 and 6 and would not have caused the JPS to continue its dependency on ADO for the month. The Gleaner was also told that JPS reverted to the use of LNG at 9 p.m. on July 6.

An investigation has been launched into JPS' billing practices post Hurricane Beryl.

- Kimone Francis

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