Electricity theft jumps to $30.5 billion as energy price rises
Published:Wednesday | July 20, 2022 | 12:07 AM
Rising energy prices are being accompanied by an increase in electricity theft, which is now estimated to cost the Jamaica Public Service Company, JPS, and its paying customers US$200 million, or more than $30.5 billion, annually, a whopping 80 per cent more than estimated nearly a decade ago.
“We see the indicator of theft increasing,” JPS CEO Michel Gantois said at a Gleaner Editors’ Forum at the newspaper’s office in Kingston last week.
“The two indicators that show that consumers are having difficulties paying are worsening. One is late payment and the other is theft of electricity, which is increasing because some people who would never pay are stealing more, and some who paid have switched from paying to being [electricity] thieves.”
Paying customers share the cost of theft, along with JPS, according to the company. The amount is determined by the utilities regulator, the Office of Utilities Regulation.
Between 18 per cent and 20 per cent of all electricity generated is stolen.
“So, we are talking closer to $200 million,” said JPS’s Chief Financial Officer Vernon Douglas, noting that in US-dollar terms, the cost of theft has risen over time.
“If you index that to the price of fuel, then that US$1 is probably US$1.20 in terms of the overall cost of the commodity being stolen,” he explained.
ANTI-THEFT TECHNOLOGY
Theft, as estimated by the utility provider, increased 12 per cent from four years ago, and jumped 80 per cent when compared to nine years earlier, according to data in JPS’s tariff application, which it uses to advocate for a rate increase from its regulator.
“The war in Ukraine, we cannot do anything about that, but theft is something under our control,” the JPS CEO argued.
Gantois said that anti-theft technology alone cannot solve the problem. Rather, it requires a change of attitude within the society. And it requires the assistance of law enforcement, the courts, social intervention programmes, church leaders, as well as leaders in communities and advocacy groups.
The annual figure of US$200 million in theft now equates to the dollar value of the sale of the government’s 80 per cent stake in JPS in 2001. Since 2001, majority ownership of JPS changed from US-based Mirant to Taqa in the United Arab Emirates, and then to Japanese and Korean investors Marubeni and Korea East West Power. The Government still holds 19.9 per cent of JPS shares, with other minority shareholders holding the rest.
Oil prices in March hit US$140 a barrel, or 90 per cent higher year-on-year. The price this week, however, was an average US$93 a barrel, or 60 per cent higher year-on-year. Natural gas remains up at 130 per cent year-on-year to over US$6.40 per unit.
Over a similar period, the average residential customer’s bill has jumped from $6,700 to $9,600 per month between January 2021 to March 2022, according to JPS data. For a small commercial customer, the bill moved from $500,000 a month to $770,000 per month in March 2022. A similar increase affected larger commercial customers.
In 2013, JPS’s tariff review stated that electricity theft was costing the country US$110 million. The 2013 figure attributed US$60 million to wasted fuel, another US$20 million in foregone revenues for the utility, and an annual budgetary expenditure of some US$30 million in anti-theft devices and activities. For 2018, JPS, in its tariff figures published in 2019, valued the cost of electricity theft to the country at US$177 million, or 12 per cent less than the current figure.