Government departments and institutions accounted for up to $11 billion, or approximately $880 million monthly, in electricity costs last year – nearly 15 per cent of the total amount of electricity consumed annually in Jamaica.
Prime Minister Bruce Golding and Energy and Mining Minister James Robertson, who disclosed this information during a workshop staged last Thursday at the Knutsford Court Hotel in New Kingston, cited government agencies and departments, as well as public schools and hospitals, among the primary consumers.
Oil accounts for nearly 40 per cent of the country’s total import bill.
Golding said Jamaica, which has one of the world’s highest energy-intensive ratings, was also one of the most inefficient users of electricity.
“We use 20,000 BTUs (British thermal units) to produce one US dollar of output of value. The global average is less than quarter of that.
“We waste energy, and Jamaica’s economic future cannot be secured unless we address this problem in a fundamental way,” the prime minister lamented.
Golding said the Government, through the energy and mining ministry, had developed four significant platforms – the national energy, national renewable energy, national energy from waste as well as the energy conservation and efficiency policies – to address the issue.
However, the prime minister acknowledged that Jamaica experienced several challenges to fulfilling some objectives in the national energy policy, which called for increasing the mix of renewable energy sources.
“Right now, we’re somewhere near five per cent, and the policy requires we get up to 10 per cent by 2015 and 20 per cent by 2030. That’s ambitious and particularly challenging,” Golding admitted.
He said the challenges were even more pronounced when analysis examined Scandinavian countries, which were environmentally conscious and advanced in their use of renewable energy sources, albeit paying more for it.
“Renewable energy is not always cheaper energy, but they are prepared to pay more in order to get energy that is clean, green and sustainable. Our consumers can’t be asked to bear that burden, and that’s part of our problem,” Golding said.
The prime minister added that while any search for alternative energy sources also had to be cheaper – in order for them to be viable – conservation was important to sustainable energy management.
Golding accused Jamaicans of being price-insensitive when it came to energy conservation, citing motorists’ refusal to change fuel-consumption patterns during 2008 when oil prices rose as high as US$148 per barrel.
The Government’s 10 per cent GCT charge on the electricity bills of persons consuming more than 200 kilowatt-hours monthly in order to make up revenue shortfall had little effect on consumption patterns.
“The information I have from the JPS (Jamaica Public Service Company – the monopoly electricity provider) is that they haven’t even blinked. They pay the 10 per cent and consume the same amount of electricity,” said Golding.
The Jamaica Public Service (JPS) in its own inimitable way has sent yet another ‘shock wave’ to consumers when it announces that, among others, it will now be adding general consumption tax to reconnection charges. Never mind that the disconnection might have resulted in the first place from their actions – i.e., either the high cost to use their service or massive overbilling.
Electricity supply, like water, is a basic utility without which the quality of life for all individuals will be adversely affected. So, who will speak up against the action of the JPS?
Our first line of defence, the minister of mining and energy, is preoccupied with his personal well-being, and the next line of defence, the Office of Utilities Regulation (OUR), like many of us, are ‘shocked’ into silence. We dare not take to the streets as the residents of Seaview Gardens found out recently. So what are we to do? We need to examine carefully the role and functions of the OUR.
The OUR was established by an act of Parliament in 1995 to regulate the operations of utilities companies. According to the official website of the OUR, its role as an independent regulator is often misunderstood, particularly by its largest stakeholder group, consumers, who are of the general belief that it seems to side with the utilities providers.
The OUR’s mandate is not that of a consumer advocacy group and, as such, will only intervene in grievances if the affected utility consumer writes to them after getting no satisfaction from the utility company who, in their opinion, did them a disservice. If the overbilling by the JPS is not classified as grievances then what is? This overbilling for which many consumers are unable to pay will now have GCT added for the sure disconnection that will follow. All this while the OUR sits and do nothing when, in fact, it can. Even though it does not see itself as consumer advocacy group, it has a number of divisions, such as the Consumer and Public Affairs.
This division deals with consumer affairs, communication and information. It is in this division that the works of an independent advisory group is facilitated. The name of this group is Consumer Advisory Committee on Utilities. If the OUR wants to intervene on behalf of its consumers/stakeholders, then it can do so directly or indirectly, or however it thinks fit. Not to do so will only make consumers question their relevance in face of this frontal assault on our pockets by the JPS.
And I must admit that the JPS, over the years, has lost a lot of revenue through electricity theft, but we must not forget that a percentage of that ‘lost revenue’ was recovered from us legitimate customers on the approval of no less than the OUR, which now stands impotent.
I am, etc.,
HOWARD D. HAMILTON
However, it has admitted that clients have experienced challenges in taking up the loans, which are disbursed through approved financial institutions (AFI), such as commercial banks, merchant banks, credit unions and micro finance institutions and the National People’s Co-operative Bank.
Some $84 million in loans has been disbursed with another $40 million approved to eight clients under the programme since 2008, general manager of the DBJ’s AFI relationship division, Yvonne Lewars disclosed on November 10.
“There has been take up of the funds, but not as fast as we would like,” Lewars told Environment Watch.
The DBJ’s managing director Milverton Reynolds, stating that renewable energy was of “strategic importance” to the organisation, said the DBJ recently negotiated a grant of US$591,000 or approximately $51 million from the Inter-American Development Bank (IDB) dedicated to energy usage.
The grant would be used for three things, namely:
* to implement a study to determine the demand for energy in Jamaica;
* to support the training and certification of energy auditors in partnership with the University of Technology; and
* to launch a public education programme about the importance of renewable energy.
Describing the cost of energy as “too onerous and burdensome” for businesses in Jamaica, Reynolds said this ought not to be a huge problem because the island has “endless sunshine and wind”.
He was speaking at the opening of the Scientific Research Council’s 23rd science and technology conference and exposition at the Jamaica Pegasus Hotel in Kingston on November 9.
However, responding to complaints that the loan approval process was too complex, Lewars explained that before an alternative energy loan is disbursed, an energy audit must be carried out. This involves assessing the energy usage of an entity or business and determining how much can be saved by making adjustments, such as changing bulbs, properly sealing windows, and improved ventilation to areas, even before a loan for alternative energy is disbursed.
Lewars said in an effort to improve the approval process, the DBJ had developed models for various sectors in order to reduce the need for MSMEs to pay for audits. Models had been done for poultry businesses and manufacturing, among other sectors.
“It’s a very specialist area. We are training our staff on the various alternative energy sources that can be used, but before we use alternatives, what can we do with the existing business to reduce cost? For example, a simple water heater in a hairdressing business can greatly reduce the energy supply chain,” she said.
In the meantime, the DBJ said it was developing better relationships with AFIs and meeting with business persons to make the applications more acceptable.
Former energy minister Clive Mullings has been among persons calling for the DBJ to disburse alternative energy loans itself, instead of wholesaling them though AFIs.
The loans provide up to $15 million or 90 per cent financing to clients at 9.75 per cent interest.