Higher Fuel Costs Push Up Electricity BillsSeptember 19, 2012
A higher Fuel & IPP Charge has resulted in an increase on customers' electricity bills this month.
The Fuel & IPP Charge on September bills is $21.881 per kilowatt-hour (kWh), compared to the charge of $16.748 per kilowatt-hour (kWh) applied to August bills. For the average customer who consistently uses 200kWh of electricity for the month, this means an increase of about $1,000 on his or her electricity bill.
This month's Fuel & IPP Charge is consistent with the charges applied to bills between January and July, when this line item on bills ranged from approximately $20 per kWh to a high of $24 per kWh. The August Fuel & IPP Charge was outside of the average for the year, as a result of a combination of factors:
a) The one-off Petrojam rebate of US$3.8 Million, for the overcharge on fuel purchased by independent power supplier, Jamaica Private Power Company (JPPC);
b) a new efficiency target set by the Office of Utilities Regulation (OUR) for JPS; and
c) an overall reduction in the cost of oil used to produce electricity for the billing period.
Unfortunately, the relief for our customers was temporary, as an increase in the cost of oil has pushed bills back up this month. The Fuel & IPP Charge on bills covers the cost of fuel as well as variable costs incurred by the Independent Power Producers (IPPs) from whom we purchase electricity for sale to customers. This Charge changes each month, primarily as a result of changes in the cost of the fuel that JPS and the other power producers purchase from Petrojam. We urge our customers to continue their conservation efforts, in order to minimise the impact of rising oil prices on their bills.
NB: At this month's rate, the cost of electricity to customers is approximately US 36 cents per kWh.