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OUR proposes bigger compensation for poorly served utility customers

Power provider Jamaica Public Service Company, JPS, paid out $816 million for breaches of customer-guaranteed standards over a decade.

The bill was about 30 times larger than payments by another monopoly utility, the National Water Commission, NWC. The regulator was also concerned that some breaches lasted for protracted periods.

The Office of Utilities Regulation, OUR, has put a proposal on the table on how it plans to formally deal with protracted breaches of the guaranteed standards, referred to as GS.

NWC did not on the surface have an issue with the proposal, but JPS wants the OUR to recognise the difficulty in restoring service within the context of Jamaica’s complicated landscape.

“We completed the consultation process on the recommendations and are finalising the determination notice. Once completed it will be made public,” said Elizabeth Bennett Marsh, head of communications and public education specialist at the OUR.

The regulator said GS are quality of service performance measures that set reasonable standards for the provision of utility services delivered by the JPS, the NWC and private water and sewerage providers to an individual customer. If these service providers fail to comply with a GS, the affected customer is entitled to compensation, which is usually applied as a credit to the account.

“As such, GS acts as an incentive for the service providers to improve performance,” said the OUR in its consultative document titled Comprehensive Review of the Guaranteed Standards Scheme for the JPS and NWC. The GS scheme has been in operation for JPS and NWC since 2001, but the ones for private providers were set up recently.

The OUR said JPS and NWC maintained a compliance rating of over 90 per cent in their delivery of GS.

Over a decade, from January 2012 to December 2021, JPS committed 597,075 breaches, which attracted potential compensation of $1.4 billion. NWC committed 56,420 breaches which attracted potential payments of about $123 million.

After investigations, JPS paid out $816 million and NWC, $27 million.

The bulk of the breaches, 86 per cent, relate to estimated bills for JPS; and meter readings, 61 per cent, for NWC.

The OUR noted that breaches are not always addressed within stipulated timelines and plans to apply a charge.

The regulator has proposed that for NWC, “where the GS breaches are not corrected within the specified timelines, “the applicable compensation is payable for up to six periods of non-compliance”.

For JPS, where for example, “the OUR is aware of customers being billed based on consecutive estimated consumption for prolonged periods, which exceeds six months. In an effort to mitigate this practice, the OUR has established that, where JPS GS breaches are not corrected within the specified timelines, the applicable compensation, per breach, is payable for up to eight billing periods of non-compliance,” the regulator said.

Additionally, it wants to implement additional GS for prepaid customers.

The JPS has taken issue with the OUR proposal in its formal response.

“The OUR has not identified the unique quality of service challenges of Jamaica relative to the other jurisdiction on which it ‘deemed it reasonable’ to impose additional compensation for up to the current maximum eight periods of breach for all standards. This is double the cap of four periods at the start of the GS regime.” the power utility said.

The NWC said it was not averse to the imposition of compensation payments to customers where it breaches the agreed or established GS.

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