US$10-m write-off JPS struggles with huge bad debt yearly

BY ALPHEA SAUNDERS
Senior staff reporter
saundersa@jamaicaobserver.com

Tuesday, November 21, 2017

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JAMAICA Public Service Company (JPS) is losing US$10 million annually to customers who do not settle their bills — a little less than half the amount that the company is also losing to electricity theft.

President and chief executive officer (CEO) of the light and power company Emanuel DaRosa made the revelation yesterday during the Jamaica Observer Monday Exchange at the newspaper's head office on Beechwood Avenue in Kingston.

“Those are our legitimate customers who at the end of the year don't pay their bills and we are forced to, after we have gone through the collection process and we find that there is no ability to collect, write off that debt,” DaRosa said. “JPS is trying to control its arrears and long-standing bad debt, it's an organisation that's struggling with bad debt.”

The CEO emphasised that the company has been trying to limit those losses as much as possible, which is why customers are only allowed eight days before they are liable for disconnection.

“If we let people go further, that US$10 million will grow even larger. It's not because we are trying to be mean to people, we are trying to limit how much credit we put out there because of this bad debt,” he added.

JPS' Director of Corporate Communications and Customer Experience Winsome Callum explained also that customers' payment histories are taken into consideration before disconnection.

“We do have a method of flagging our good-paying customers who pay in full and on time on a regular basis,” she said, noting that in instances where a customer may pay regularly but not necessarily on time, nor in full, they could still fall into the category for disconnection. According to Callum, about 50 per cent of customers regularly pay in full, and on time

DaRosa, who said he is prepared to take on the challenges the company faces, pointed out that electricity rates are set once every five years when a major rate application is made to the regulator, but fuel costs are adjusted (without mark-up) each month, depending on the exchange rate and other factors.

He noted that half of the power company's customers' bills are therefore fixed, while the other portion varies regularly. The JPS's next rate application is due in 2019.

Meanwhile, DaRosa said he has major plans to improve the company's operations and revenue and at the same time enhancing service to its customers. For now, losses stand at US$26.5 million, 18 per cent of which is due to theft and non-technical losses. The JPS, he said, plans to spend US$25 million installing smart meters as part of its plans to clamp down on theft.

“If everybody in Jamaica paid for electricity, the power rates would drop by 18 per cent. For every per cent that we can reduce power theft there is about a US$4 million cost-saving to the consumer,” said DaRosa.

“This is a major challenge for this country, and it's one that we are committed to working on,” he said.

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