Jolting JPS demand
Published:Wednesday | August 24, 2011 | 12:00 AM
- Customer charged $288,000 despite not using service
Arthur Hall, Senior Staff Reporter
A St Ann businessman is facing a $288,000 bill from the Jamaica Public Service (JPS) for July, despite not turning on even one light bulb using electricity from the company for the month.
However, the JPS says there is nothing unusual in this across the world.
"As long as the customer has a contract with us, the customer would be billed for demand," the company said in response to queries from The Gleaner yesterday.
The JPS was reacting to the story of Raymond Schnoor who, while embroiled in a dispute with the JPS over outstanding payments and with a monthly bill averaging $650,000, decided that his company, Chippenham Park Limited in Bamboo, St Ann, was to switch to a generator for its electricity supply.
That decision was made about the same time the JPS decided to disconnect the company's electricity supply for outstanding bills totalling $4.8 million.
Start of woes
But leaving the JPS grid on May 28 was just the start of the woes for the limestone-producing company, as it was still hit with an estimated bill for $677,000 in June.
While he was in a battle with the JPS over that bill, Schnoor received a shocker when the company sent him the bill for $288,000 for July.
According to Schnoor, while the bill reflected that his electricity usage was zero, he was told that the $288,000 was for "demand charges".
Schnoor told The Gleaner that the JPS also failed to reverse the charges for June, even though any check of his meter would reflect that he had not been connected to its grid in the month.
"I just throw them (the bills) in the garbage, because I have no money to pay them," said Schnoor.
"I did not have electricity for the two months, but still I am facing JPS bills for almost $1 million," he added.
He accepted that he would have to pay the JPS the $4.8 million which was initially outstanding, but Schnoor is livid about the demand charge which he said a JPS representative told him he would have to pay monthly for the next five months.
"This would be like alimony or if you have a girlfriend and you want to give her a going-away present," Schnoor said.
However, the JPS, in its emailed response to The Gleaner, argued that, in setting the rates for utilities all over the world, regulators usually include a demand charge, which is applicable to large commercial and industrial customers.
The company said that in Jamaica the demand charge is applicable to large business customers in the rates 40 and 50 categories, and is a reserve-capacity charge that is typically associated with the cost of ensuring that adequate generating, transmission and distribution capacity is available for these customers.
"It is applied to ensure that the utility has capacity in place to match the maximum peak kVA demand of its customers. That is, the maximum flow of electricity used at any one time by a customer," said the JPS.
"The principle is that, even though the customer is disconnected for non-payment, JPS is still obliged to 'reserve' capacity for the customer, so it will be available to the customer when he is reconnected. If, however, the customer terminates the account, then there would be no need for any provision for reserve capacity for this customer. As such, the demand charge is applied as long as a contract exists between JPS and the customer," added the company.
According to the JPS, it uses several different types of meters and the one at the factory operated by Schnoor records the average demand for every 15-minute interval. At the end of the month, that information is used to determine the actual demand for the month.
The JPS also confirmed that Schnoor would face this demand charge for a while longer.
"International best practice is that a customer pays a demand charge for reserve capacity for six to 12 months, a period which is determined by the local regulator. In Jamaica, the standard period is six months," said the JPS.
The demand charge has been a source of concern for many business operators locally, who argue that its calculation is unclear and the cost moves their electricity bills to alarming levels.
The issue was also raised with the Office of Utilities Regulation by the Micro, Small and Medium Enterprises Alliance, among its list of complaints against the JPS, at a meeting in July.
"With the JPS, there is no way to conserve," Schnoor lamented yesterday. "Even when you don't use their electricity they have this demand charge. So they must get you."
Chippenham Park Limited is a limestone and hydrated lime-producing company which has been operating locally for decades.