Power Wheeling Tariff Methodology Consultation Document 2019 November 4

Power Wheeling Tariff Methodology Consultation Document 2019 November 4

This Consultation Document sets out and invites comments on the various methodologies
available to the Office of Utilities Regulation (“OUR”) for consideration in the setting of prices
in the soon-to-be implemented Electricity Wheeling Framework in keeping with the provisions
of the Amended and Restated All-Island Electric Licence, 2011(the “Licence”).

Condition 12 of the Licence stipulates that the Jamaica Public Service Company Limited (“JPS”)
should within a 12-month period, which ended in August 2012, submit to the OUR proposed
wheeling charges for approval. According to the Licence these wheeling charges should be based
on a cost of service study conducted by the company within the 12-month period prior to the
stipulated date for the submission of the wheeling tariffs for approval.

In addition to the stipulated cost of service study, the setting of wheeling rates requires a proper
regulatory framework which is broader than the calculation of the rates. It involves
rules/guidelines informed by clear principles to ensure the efficient operation of the process. The
OUR has therefore deemed it a necessity to build a wheeling framework that will govern
transactions related to the use of the national transmission and distribution grid by selfgenerators in the transportation of electricity from power production sites to consumption points
where demand and supply are not co-located.

The Consultation Document outlines the various methodological options that may be employed
in the development of wheeling charges and explores factors such as congestion and losses that
should be taken into consideration in the design process. The document also recommends the
MW-KW (load flow) approach based on the simplicity of the methodology, the efficiency it
incorporates and its capacity for cost recovery. Stakeholders and other individuals with an
interest, are being asked to contribute to the design of the framework by providing feedback on
this document.

On receiving responses, the OUR will make a determination on the methodological approach and
undertake the modelling of the wheeling charges as well as framing the other instruments
required to make this feature of the electricity industry possible

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