NWC needs rate regime that can attract financing, says Pickersgill

BY ALICIA DUNKLEY-WILLIS Senior staff reporter

WATER, Land, Environment and Climate Change Minister Robert Pickersgill says his ministry is now awaiting the determination of the Office of Utilities Regulation (OUR) on the National Water Commission’s (NWC) rate increase application.

The NWC applied to the OUR on April 12, 2013 for a new adjustment. It is seeking a 19 per cent increase in rates, in addition to other adjustments. The OUR has since conducted public consultations on the request for a rate review involving the NWC which made presentations at the meetings and fielded questions from the public on its application.

PICKERSGILL… the high cost of energy remains a challenge for the NWC

The minister has, in the meantime, dismissed criticism from the Opposition Jamaica Labour Party about the process.

“I defiantly disagree with the sentiments expressed by the Opposition spokesman and his leader. I would have thought that the protocol surrounding a live application before the OUR would have prevented comments aimed at politicising the review process,” Pickersgill told the House during his contribution to the 2013/14 Sectoral Debate at Gordon House in Kingston.

Opposition Leader Andrew Holness, during his contribution to the Budget Debate in April, urged the Government not to permit the 19 per cent rate increase. At the same time, the party’s spokesman on water and housing, Dr Horace Chang, said the money could have been better spent on improving the commission’s procurement and implementation capacity and to speed up K-Factor-funded projects.

Pickersgill, on Tuesday, stopped just short of tagging the Opposition as hypocritical.

“It is curious that in 2008, under their stewardship, they sought an increase of 44 per cent. They received 23 per cent, with a scheduled review five years later. The NWC is now seeking an increase of 12 per cent on the base rate along with adjustments to the X Factor,” said the water minister.

He also told the House that the NWC has completed its public consultations, in conjunction with the OUR, which revealed that “the primary concern of consumers is access to potable water rather than the cost, especially in the rural areas”.

He added that the tariff submission is based mainly on the commission’s efforts to expand and improve potable water and sewerage services to the Jamaican people.

Pickersgill said the entity’s expansion and improvement needed to be supported by a rate regime which would enable it to attract financing for its programmes and projects.

In the meantime, the minister said the high cost of energy consumption remained a challenge for the NWC.

“The National Water Commission is one of the largest consumers of energy in this country and in fact, uses approximately five per cent of the total energy consumed in the country. We are aiming for a reduction in energy consumption costs by 30 per cent over the next five years,” the minister said.

Pickersgill told the House that among the strategic initiatives to be pursued by the Commission to reduce energy usage, are resorting to the alternative production of energy, the replacement of 320 old inefficient pumps, rehabilitation of 288 tanks with the necessary controls to prevent overflows and, most importantly, taking advantage of using the recently approved power wheeling policy.

He said, however, that despite an increase in the Jamaica Public Service’s energy costs of nine per cent from 2011 to 2013, the NWC’s energy expense only increased by four per cent year over year. “This suggests that the NWC has actually become more energy-efficient in 2012/2013,” Pickersgill noted.

In the meantime, he said non-revenue water or losses consisting of leaks, overflowing tanks, meter under-registration and water theft continue to plague the entity.

“The National Water Commission is presently pursuing several initiatives which are designed to stop this haemorrhaging. These include mains replacement, network management, water supply management and mass replacement of old defective revenue meters,” Pickersgill told the House. He said the NWC will be replacing 100,000 domestic meters and 3,000 large commercial/industrial customer meters, commencing this September.