The Office of Utilities Regulations (OUR) has given Jamaica Public Service Company (JPS) six months to refund customers $973 million for foreign exchange adjustments applied in 2013.
The regulator said that the charge was “unilaterally imposed during the period March 2013 to December 2013 as Foreign Exchange Adjustment on fuel supplied by Petrojam Limited”.
JPS is required to provide the OUR with details of the mechanism that it will use to repay customers by February 23, or seven days after the effective date of the regulator’s directive which was made on February 16.
The determination was made by the OUR after it concluded that JPS had no authority under the existing regulatory framework to “unilaterally impose the additional cost on customers”.
A directive to repay the sums was previously issued by the regulator to JPS last July, but the light and power company protested the decision, saying that the OUR “arrived at its determination on the matter without the benefit of due process and requested a meeting with the Office to discuss the matter”.
The companies met in December, but the regulator was not convinced by JPS.
JPS has since responded to the OUR. The light and power company said it is reviewing the regulator’s directive.
“The OUR asked for an explanation of the charges in May 2013, which we provided in a matter of days. It is not clear why we did not hear from the OUR until more than a year later on this issue,” said JPS’ President and CEO Kelly Tomblin.
“JPS believes we acted within the confines of the licence, but it appears, once again, that the OUR and JPS have a fundamental difference on what prudently incurred costs include,” she explained.
The latest directive comes on the heels of JPS announcing that it will appeal the electricity rate determination handed down by the OUR in January.
Two weeks ago, JPS said that it was making the rate appeal on specific regulatory principles.
“We believe that it is in the best interest of Jamaica to have an objective, independent appellate body review the matter, in keeping with our operating Licence,” said Tomblin.
“We are appealing specific regulatory principles – which need to be addressed in order to avoid a damaging precedent, with potentially devastating consequences for the energy sector.”
More specifically, the utility provider is challenging issues related to what is considered to be legitimate cost recovery and equity.
“JPS is simply asking to be treated like other investors in the energy market,” said Tomblin.