Jamaica Gleaner
Published: Monday | March 30, 2009
Home : Commentary
OUR, please consider well

Garth Rattray

Jamaicans are having a hard time making ends meet. Honest citizens practise hard work, thrift and sacrifice to survive. The heavy tax burden, spiralling inflation rate and diminutive interests paid on money saved in the banks mean that people are always losing (financial) ground. Some sought to play catch-up by investing in alternative investment entities, but their collapse only made matters worse for everyone.

With the global economic downturn came reduced remit-tances (a major source of foreign exchange), lost jobs and large and small companies downsizing or closing. The demand for our traditional exports has waned significantly. The Government, private companies and individuals are now more broke than ever before.

In this economy where companies, financial institutions and governments are literally battening down to weather this category-5 economic hurricane, the Jamaica Public Service Company (JPS) is seeking to obtain 'adjustments to its existing tariff structure' (a significant increase in their rates) claiming that it needs the money to carry out expansion projects to become more efficient. This is scary because electricity bills already constitute a major portion of the monthly expenditure for households and businesses.

Although the JPS has asked the Office of Utilities Regulation (OUR) for an average increase of 23 per cent, this is to be spread over a four-tier range. Low-end consumers (domestic users with 0 to 100 kilo Watt hours per month) will pay 5.8 per cent and high-end consumers (commercial users with more than 2,000 kilo Watt hours per month) will pay 26.8 per cent. That gives the illusion that, as long as you use a minimum of electricity, your increased cost will be nominal. However, commercial (high-end) electricity consumers will pass on their increased costs to us (the customers) because our harsh economy has totally eroded any financial buffer that they had.

There's a shocking disconnection between our power company and our powerless consumers. If the JPS has its way, the rate hike will affect everybody and trigger a new round of steep inflation. Even government institutions will experience excessive increases in their overhead (operational) costs and pass it on to us (the taxpayers). The combination of inflation and global economic crisis is a recipe for widespread poverty and increased criminality.

Our very essential service

I protested the selling of the JPS - our very essential service - to a private concern, especially a foreign one. I argued that international investors are not in business to lose money so there must be some potential profitability in the JPS. The first of three foreign investors failed to fulfil its promise to upgrade our power system and provide us with 21st-century service. Now, in addition to high rates (covering everything from fuel to hurricanes), the 'current' owners want us to pay for future expansion projects. In a world where companies timidly seek small, single-digit increases in their rates, the JPS boldly requests exorbitant increases because it is a monopoly.

Contrary to popular belief, the OUR is neither a consumer-protection agency nor a consumer-advocacy organisation - it is a facilitator and referee. I haven't heard any entity championing our cause, only individual voices are crying foul. Jamaican consumers desperately need strong advocacy groups/organisations with very sharp, non-partisan teeth.

The OUR employed a group of international energy consultants. The regulatory authority is obviously cognisant of the far-reaching and long-lasting ramifications of their decision. I hope that they realise that their experts with, 'substantial experience in the pricing of electricity tariff applications' know nothing of the uniqueness of Jamaica's fragile economy. Failure to take that into account may plunge this country into intractable poverty.

Garth A. Rattray is a medical doctor with a family practice. Feedback may be sent to garthrattray@gmail.com or columns@gleanerjm.com .

Home | Lead Stories | News | Business | Sport | Commentary | Letters | Entertainment | Flair |