Jamaican households pay among the highest electricity tariffs in the Western Hemisphere. That tariff is not a single number — it is a stack of three separately-caused costs that arrive at the customer's meter fused into one bill: the cost of imported fuel, the cost of electricity that is generated but never billed (system loss), and the regulated return earned by the Jamaica Public Service Company. When the three are billed as one, a cost caused by one party is silently paid for by another.
The Office of Utilities Regulation periodically reviews and resets the JPS tariff. The single most consequential decision in that review is how much of the roughly 26 percent system loss the customer is required to fund versus how much the utility must absorb. Every percentage point of loss shifted onto the customer is, in effect, a charge for electricity the customer never received.
This paper argues that the tariff review should require cost separation before cost recovery: fuel, loss, and margin should be disaggregated, each attributed to the party that controls it, and only then recombined into a rate. It sets out how the separation works and three recommendations to the Office of Utilities Regulation and the Ministry of Science, Energy and Technology.
An electricity tariff feels like a price. It is not. It is a settlement — the agreed division, between a utility and its customers, of the total cost of delivering power. In Jamaica that total cost is dominated by three components with three completely different origins.
The first is fuel. Jamaica imports the fossil fuel that generates most of its electricity, and the price of that fuel is set on world markets far outside the control of either JPS or the Jamaican customer. This cost is genuinely external; passing it through is defensible.
The second is system loss: electricity that JPS generates and buys but never bills, because it is lost in transmission and distribution (technical loss) or stolen through illegal connections and unmetered use (non-technical loss). On the JPS grid, combined losses have run at roughly one-quarter of all electricity on the system — a figure many times the loss rate of a well-run grid.
The third is margin: the regulated return JPS is permitted to earn on its assets, the incentive for it to remain a going concern and to invest.
These three costs have three different controllers. Fuel is controlled by the world. Margin is controlled by the regulator. But system loss is controlled overwhelmingly by the utility, which owns the network, chooses the maintenance schedule, and holds the meters. When all three are billed as a single tariff line, the customer cannot see how much of the bill is the cost of the utility's own losses — and a cost the utility controls is quietly recovered from a customer who does not.
In every tariff review the regulator must answer one question that dwarfs the others in its effect on the household bill: of the electricity lost to the grid, what share should the customer pay for and what share must the utility absorb? This is the loss-sharing rule, and it is where cost-attribution either happens or fails to happen.
Consider the structure of the incentive. If the tariff allows the utility to recover most of its losses from customers, the utility bears little of the cost of losing electricity — and therefore has weak financial reason to invest in the metering, network hardening, and anti-theft enforcement that would reduce loss. If instead the tariff caps recoverable loss at the level a well-run grid would achieve, every point of loss above that cap is borne by the utility, and reducing loss becomes directly profitable to it.
The loss-sharing rule, in other words, is not an accounting detail. It is the single lever that determines whether the party that controls the loss has any reason to reduce it. A tariff that passes loss through in full removes that reason entirely.
A cost should be recovered from the party that controls it. Fuel cost, controlled by no one locally, is legitimately passed to customers. Loss cost, controlled by the utility, should be recovered from the utility above a defined efficiency benchmark — with only the benchmark level of loss passed to customers. This aligns the bill with causation.
Human Intelligence LLC proposes that the tariff review adopt a three-step discipline before any single rate number is published.
Publish the tariff not as one figure but as its three constituent components — fuel, loss, and margin — each expressed as a per-kilowatt-hour amount. This is a transparency step only; it changes no policy. But it makes visible, for the first time on the household bill, how much of the price is the cost of electricity the household never received.
For each component, name the party with operational control. Fuel: external market. Margin: regulator-set. Loss: split into technical loss (network design and maintenance — utility-controlled) and non-technical loss (theft — a shared responsibility of utility metering and enforcement). Attribution is the analytical core: it converts a fused bill into a map of who caused what.
Set a loss benchmark — the loss rate a comparably-sized, well-run tropical grid achieves — and allow the customer tariff to fund loss only up to that benchmark. Loss above the benchmark is recovered from utility margin, on a glide path that gives the utility time to close the gap. The recombined tariff now prices the same total cost, but assigns the controllable portion to the controller.
The Office of Utilities Regulation should require that any JPS tariff submission present fuel, system loss, and regulated margin as separately-stated per-kilowatt-hour components, with the loss component further split into technical and non-technical. No single blended rate should be approved without this breakdown on the public record. Transparency is a precondition, not a concession.
The regulator should fix a target loss rate benchmarked to well-run grids of comparable scale and climate, and cap customer-funded loss at that benchmark. Loss above the benchmark should be recovered from utility margin, phased over a defined number of years so the utility can invest in metering and network hardening rather than face a cliff. The glide path converts loss reduction from a discretionary goal into a financial obligation.
Before any licence renewal or major tariff reset, the Ministry of Science, Energy and Technology should commission an independent technical audit of where system loss physically occurs on the grid — separating feeder-level technical loss from geographic theft concentration. A rate cannot fairly divide a cost that has never been measured at the point where it occurs. The audit is the evidentiary foundation the loss-sharing rule requires.
The high price of Jamaican electricity is often debated as if it were a single grievance against a single company. It is more precise, and more useful, to see it as three costs wearing one number. Two of those costs — fuel and a reasonable margin — belong on the customer's bill. The third — the cost of a quarter of all electricity vanishing before it is billed — belongs, above an efficient benchmark, on the balance sheet of the party that owns the network.
The tariff review is the one moment where that separation can be written into law rather than argued about after the fact. Separating the stack costs nothing and changes no policy by itself. But it is the step without which every subsequent decision — how much loss to fund, how fast to reduce it, what return to allow — is made in the dark. Human Intelligence LLC is prepared to support the Office of Utilities Regulation and the Ministry with the cost-attribution analysis this separation requires.