The Office of Utilities Regulation, (OUR) , has found that the ‘bill shock’ experienced by Jamaica Public Service (JPS) customers after Hurricane Beryl was due to a significant increase in the fuel rate in July, which was applied to August bills. 

In a statement, the OUR  said the bill of an average residential customer with a monthly consumption of 150 kilowatts per hour jumped by 15.6 per cent between the July and August billing cycle. 

It noted that at the time, it instructed JPS to re-issue bills with zero consumption to reflect a corresponding zero money value. 

The OUR  said it also advised that once the relevant information was received, it would investigate JPS’s billing computation to determine the accuracy and validity of the rates that had been applied to August bills.

In the investigation report released on Wednesday, the OUR said while it found that the computation of the fuel charge was correct, it also concluded that its application could and should have been better managed to ease the bill shock.

The regulator said the major factors that triggered the increase included a reduction in the supply of and the demand for electricity in July, a net increase in overall cost of fuel from various sources and a significant fuel volumetric adjustment from a previous period. 

It said the volumetric adjustment, while representing a legitimate cost recoverable by JPS, could after consultation between the OUR and JPS, have been spread over multiple billing periods to ameliorate the price effect on customers.

Meantime, the OUR explained that the rise in fuel stemmed from the unavailability of natural gas and the curtailment of renewable energy plants during and after the hurricane, which led to the more expensive Automotive Diesel Oil (ADO) being used in greater volumes than normal. 

It said even though there was application of a waiver on the fuel tax on ADO allowed by the government in July, this was not enough to nullify the rise.

The OUR noted that other lesser factors which impacted August bills were the billing foreign exchange rate and the non-fuel ipp rate which had increased by approximately 1 and 3.4 per cent respectively. 

It added that the passage of Hurricane Beryl underscored the need for enhanced resilience in the electricity sector, the importance of pre-emptive measures to protect infrastructure and ensure rapid recovery, along with the need to reduce reliance on any single fuel type in the generation mix.