The Fuel & IPP Charge on your bill combines two factors: 1) The cost of fuel used to generate electricity and 2) The cost of the electricity supplied by Independent Power Producers (IPPs). The fuel cost is by far the greatest contributor to the Fuel & IPP Charge. JPS says it needs approximately 20,000 barrels of oil each day to meet the daily electricity demands of customers island-wide. The company purchases this oil at world market prices which may vary each month. The mechanism used to calculate the fuel cost recovery on a monthly basis under the current tariff operates according to the following formula:
The heat rate and system loss components are efficiency measures introduced by the OUR to incentivize JPS to generate, transmit and distribute electricity as efficiently as possible. IPPs supply JPS with more than one-third of the electricity they sell to customers. Some of the costs of the IPPs are reflected in the Fuel & IPP Charge. However, this portion of the Fuel & IPP Charge is usually very small – less than one percent. JPS Fuel and IPP Charge for April is at a five year low at $14.67 per kwh. The following is a list of the rate from January 2014:
The IPPs are power generation facilities not owned by JPS. There are currently four IPPs (Jamaica Energy Partners (JEP), Jamaica Private Power Company (JPPC), Wigton Windfarm, and Jamalco) that supplies electricity to the JPS grid on a continuous basis .