PROJECTS
JPS Tariff Submission, Jamaica
The problem
Jamaica’s national electricity utility (JPS) was not earning an adequate return on capital and was at risk of customers switching to self-generation.
How we helped
We prepared a submission to the regulator arguing for a tariff increase. To do this, we forecast electricity demand, calculated JPS’s cost of capital, and used Data Envelope Analysis to estimate an appropriate X-factor. We also made the case of a revenue cap to protect the utility from demand risk and to decouple distribution revenues from energy sold.
Impact
The OUR rejected the tariff increase and the revenue cap proposal JPS appealed. Castalia provided expert testimony. The OUR’s surprise decision contributed to a rethinking of electricity regulation in Jamaica. The Office of Utilities Regulation Act was amended to require the regulator to establish and follow clear procedures for the use of analytical tools in setting electricity tariffs. Non-Executive Directors were appointed to oversee the technical staff and hold them accountable. The government granted JPS a new licence, which provided for a revenue cap. Once these changes had been agreed, JPS settled its appeal against the regulator’s decision.
How can we help you?
How can we help you?
WASHINGTON, DC
+1 (202) 466-6790
1747 Pennsylvania Avenue NW, Suite 1200
United States of America
SYDNEY
+61 (2) 9231 6862
Suite 19.01, Level 19, 227 Elizabeth Street
Australia
AUCKLAND
+64 (4) 913 2800
Sinclair House, 3 Glenside Crescent
New Zealand
WELLINGTON
+64 (4) 913 2800
Level 2, 88 The Terrace
New Zealand
PARIS
+33 (0)1 85 64 10 22
3B Rue Taylor
France
BOGOTÁ
+57 (1) 508 5794
Calle 81 #11-08, Piso 5, Oficina 5-121
Colombia
Thinking for a better world.
WASHINGTON, DC
+1 (202) 466-6790
1747 Pennsylvania Avenue NW, Suite 1200
United States of America
SYDNEY
+61 (2) 9231 6862
Suite 19.01, Level 19, 227 Elizabeth Street
Australia
AUCKLAND
+64 (4) 913 2800
74D France Street, Newton South
New Zealand
WELLINGTON
+64 (4) 913 2800
Level 2, 88 The Terrace
New Zealand
PARIS
+33 (1) 73 44 26 97
6 Rue Duret
France
BOGOTÁ
+57 (1) 508 5794
Calle 81 #11-08, Piso 5, Oficina 5-127
Colombia
Thinking for a better world.