Athaliah Reynolds, Staff Reporter

THE Jamaica Labour Party (JLP) is demanding that the Jamaica Public Service Company Ltd. (JPS) provide a full explanation to its customers as to why they were not given prior notification of the company's decision to apply the hurricane recovery charge to their July bills.

Clive Mullings, Opposition Spokesman on Energy, said the public has a right to know when they are going to have to pay more, before the fact.

"JPS already enjoys fuel and foreign exchange adjustments and now a Z-factor," he said. "Electricity is a necessity not a luxury, and the Jamaican people who suffer under the punishment of its (JPS) electricity rates are entitled to know."

Under the terms of the Z-factor, which was approved by the Office of Utilities Regulation (OUR) in August 2005, the JPS was allowed to collect on damage incurred from Hurricane Ivan which hit the island in September 2004. However, the light and power company opted not to implement the charges until now.

No prior warning

Customers, however, received no prior warning as the notification of the increase came by way of a bill insert on customers' July bills, the same time the increase came into effect.

Mr. Mullings further argued that the "JLP's position remains unchanged, that it cannot be policy, correct to allow the JPS to unilaterally collect from the consumer for damage to its property, yet not offering any recourse when JPS causes damage to the consumer's equipment or property".

When contacted yesterday, Winsome Callum, head of corporate communication at the JPS, said the light and power company received the go ahead from the OUR last month and, as such, was unable to undertake a massive education campaign.

No explanation was offered as to why the increase could not have been delayed until the following month.

"When the application for approval to implement the hurricane recovery charge was submitted in March this year, there was significant public discussion on the issue. However, the approval from the OUR to implement the hurricane charge was received by JPS in June," Ms. Callum said in a written response.

She added: "Extensive customer education on the matter could not have been done before the OUR approval was received, asthere was no predicting what the regulator's position on the application would have been..."

At the same time, Mr. Mullings argued that the OUR's decision to permit the JPS to recover costs through this charge is an abuse of a captive market, "which clearly flies in the face of the regulatory body's consumer charter".

But Ms. Callum pointed out that the OUR approved the hurricane recovery charge because there was not sufficient funds in JPS' self-insurance fund to offset the damage done by Hurricane Ivan, which struck three months after the fund was established.

"Note that such a fund did not exist when the company was government-owned, and 2004 presented the first opportunity as a privatised entity for such a proposal to be considered during the comprehensive rate review of that year in recognition of the unavailability of insurance for transmission and distribution assets for utilities in the hurricane belt. In 2004 JPS proposed, and the OUR approved (the establishment of the fund)," Ms. Callum explained.

She revealed that the Self-Insurance Fund currently has approximately US$7 million (J$483 million), which will assist in mitigating the effects of future hurricanes.

David Geddes, director of consumer affairs at the OUR, said it was the JPS' responsibility to ensure that its customers are forewarned about increases.

athaliah.reynolds@gleanerjm.com