Jamaica Public Service Company Ltd v The All Island Electricity Appeal Tribunal and others

A regulatory appeal tribunal empowered to confirm, modify or reverse a utility regulator’s decision may examine the available material and form its own view on whether costs were known and measurable with reasonable accuracy, although its decision remains challengeable in the courts only on conventional judicial-review grounds. The relevant question is whether the necessary information existed at the filing date, not simply whether the licensee had sufficient time to act after an award. Implementation recommendations or a later market survey do not necessarily prevent inclusion in the scheduled tariff review. The phrase managerial decisions cannot be confined to decisions made after the licence date. The wider operation of the Z-factor was left open.

Jamaica Public Service Company Ltd generated and supplied electricity under an exclusive licence, with charges regulated by the Office of Utilities Regulation, a statutory body established under the Office of Utilities Regulation Act. Following an industrial dispute, an award and a 2008 settlement required substantial back-pay for earlier years. JPS sought to recover the resulting costs through the Z-factor in the licence’s tariff formula.

The Office rejected the claim, relying on both the 2004 filing requirements and the exclusion for events due to managerial decisions. The Appeal Tribunal dismissed JPS’s appeal. Judicial review was dismissed by the Supreme Court and the Court of Appeal of Jamaica. The central issues before the Board were whether the costs were known and measurable with reasonable accuracy when the 2004 filing was made, and whether they could otherwise qualify for a Z-factor adjustment.

The Board dismissed the appeal. The 2004 filing issue was decisive, so its observations on the Z-factor were not necessary to the result.

1. Role of the Appeal Tribunal. Condition 32 gave the specially constituted tribunal power to confirm, modify or reverse the regulator’s decision, or refer it back. Its procedure could therefore involve a broader review of factual material and factual evaluation than strict judicial review. The tribunal’s own decision remained challengeable in the courts only on conventional judicial-review grounds. The Board noted possible parallels with the broader approach to review of errors of law in the United Kingdom tribunal system, including Revenue and Customs Comrs v Pendragon plc [2015] UKSC 37; [2015] 1 WLR 2838.
2. 2004 filing issue. The crucial question under Schedule 3 was whether, at the filing date, JPS possessed sufficient information to render the relevant employment costs known and measurable with reasonable accuracy. The inquiry was not merely whether JPS had sufficient time after the Industrial Disputes Tribunal’s award to make salary adjustments.
3. The tribunal was entitled to conclude that the award had resolved the dispute about the salary structure and hierarchy, rather than the underlying empirical figures. The recommendations that the Oversight Committee and consultants assist implementation did not establish that a further market survey was required before the costs could be calculated. The Board agreed with the Court of Appeal that there was ample material to support the tribunal’s conclusion. The costs were in principle prudently incurred and should have been included in the 2004 tariff submission; the regulatory scheme did not permit recovery outside the period in which they could be claimed.
4. Z-factor issue. The Board rejected the submission that managerial decisions meant only decisions made after the licence date. That construction was unsupported by the wording or policy of the licence. However, the Board doubted whether the tribunal’s simple reliance on managerial decisions made during the earlier reclassification exercise fully addressed the issue. It considered it arguable that, if costs could not have been estimated for the quinquennial review, the reference to events due to managerial decisions might concern decisions more directly connected with matters arising since that review. The point was left for a future case.
5. Subject to submissions within 14 days, the respondents were awarded their costs of the appeal.

• Privy Council: The appeal was dismissed: [2017] UKPC 20.
• Court of Appeal of Jamaica: Judicial review appeal dismissed on 13 March 2015.
• Supreme Court of Jamaica: Judicial review application dismissed on 22 March 2013.
• All Island Electricity Appeal Tribunal: Appeal against the regulator’s determination dismissed on 26 May 2011.
• Office of Utilities Regulation: Z-factor submission rejected by determination notice dated 2 March 2010.