KINGSTON, Jamaica, April 30, 2008 – The Office of Utilities Regulation (OUR) in Jamaica has approved a hike in water rates, but the National Water Commission (NWC) isn’t happy with the increase that will see Jamaicans paying around J$200 (US$2.79) extra on their monthly bills.
NWC had requested a 44 per cent rate hike, but the NWC only approved a 23 per cent increase that takes effect tomorrow, as well as an additional five per cent charge for the newly introduced K-factor programme to fund the rehabilitation of the commission’s network to bring it in line with enhanced regulatory standards imposed by the National Environment and Planning Agency.
The OUR also imposed stricter rules on the NWC, saying that it had found the commission failed to meet several of its performance targets.
“The OUR in its tariff determination for the five-year period 2008-2013 approved a 23 per cent increase in rates and imposed more stringent guaranteed standards, including a penalty for wrongful disconnection and a reduced time span for reconnection of service and meter change,” OUR Communications Manager David Geddes said.
“The revised guaranteed standards also include increased penalties for breaches of the guaranteed standards and the automatic compensation to customers for some breaches of the standards.”
But the NWC said it would suffer as a result of the decision.
“The OUR’s determination for granting a 23 per cent increase in tariffs while also imposing increasingly stringent conditions of service will have the effect of preventing the commission from undertaking all the improved projects that were proposed in our request for the tariff increase,” it said in a release yesterday.
The NWC lost about JA$2.4 billion (US$33.4 million) this financial year and while the OUR said the increase it granted would offset the shortfall, Corporate Public Relations Manager Charles Buchanan suggested that it might now take the NWC much longer to get out of the red.
He said NWC’s original request would not only have pulled the water company out of financial difficulty but would have allowed to improve service to customers.
He said the water company was disappointed with the decision since its request was “based on empirical data and compelling arguments”.