JPS sheds 14,000 customers in a year

The customer base of the Jamaica Public Service Company (JPS) was slashed by 14,000 in 2010 to its lowest levels in at least five years, new data released Wednesday shows.

JPS, however, denied that the lost accounts, which represented just over two per cent of its 570,800 customer base, was due to client reaction to high light bills. Rather, it was mainly the result of removing dormant customers, JPS president Damian Obiglio told the Financial Gleaner after the utility company's annual general meeting Wednesday.

Residential users of JPS services are down to their lowest in five years; small businesses are at their second-lowest level. Contrastingly, large industrial users are at a record high at 138, according to the company's 2010 annual report.

"There was a lot of people in schemes that had a flat rate within the inner city and they stopped paying four years ago," said Obiglio.

"This was because a number of persons were on a government system called the flat rate and they never paid, so we decided to clean the data base ... this happened across the island."

JPS is increasingly under scrutiny for its billing practices from companies and households, and businesses continuously cite energy charges as a comparative disadvantage relative to trading partners such as Trinidad and a big driver of high production costs.

Jamaicans pay about US 30-40 cents per kilowatt hour for electricity.

Obiglio said the decline in customers was too small to conclude that price was the determinant.

"The rising cost of electricity is hampering our business", but "it is a very small portion," he said. "Industrial went up and small customers went down. They regularly go up and down."

Obiglio argued that the rise in industrial customers was indicative that rates are reasonable for businesses to operate.

JPS's customer base was at its highest in 2008 at 589,160 electricity subscribers.

The decline seen in 2010 was broken down as a 2.3 per cent fall to 509,660 for residential customers; and 2.1 per cent for small commercial and industrial customers to 60,780.

Large commercial and industrial users increased 6.1 per cent to 138.

JPS has a monopoly on distribution of electricity, but not on generation. Unlike most industrial nations, the majority of Jamaica's electricity is fuelled by oil.

Crude oil prices have increased eight-fold since 1999 from a low of US$17 per barrel to a high of barrel to US$145 in 2008. Oil is now trading between US$85 and US$89.

steven.jackson@gleanerjm.com