May 2012

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The amendment to the GCT regime for electricity is causing jitters in the petroleum retail trade.

The threshold for electricity that will be taxable will be increased to 300 kilowatts per hour and the rate changed from 10 to 16-point-5 percent as of

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IT was not an easy decision for Kelly Tomblin, taking the helm of the Jamaica Public Service (JPS). In fact, the United States native harboured strong reservations about relocating to Jamaica.

But it wasn’t a fear of the country and its high crime stats that spawned Tomblin’s concern.

TOMBLIN… I bring a different perspective to a problem (Photo: Naphtali Junior)

“I am typically sent somewhere when there is something wrong with a company in the group,” Tomblin told All Woman in a recent interview. “I’m usually called when there is a growth problem.”

It was a difficult decision, too, because Tomblin, a mother of two, never lived for any prolonged time outside the US. “I have never lived internationally, no more than six months,” she said, but indicates that she is never one to resist a challenge.

The JPS appointed Tomblin, who has more than 20 years experience delivering energy in the US, just over a month ago to replace Damian Obiglio as CEO.

And so far, according to Tomblin, she is up to the task.

“If I didn’t believe it was possible I would hightail it out of here,” she declared. “I’ve been a woman in a male-dominated industry for a long time… I bring a different perspective to a problem.”

Tomblin has taken over an embattled JPS facing widespread flak for its high electricity charges and an underlying feeling that the monopoly is raking in profits without concern for its customers, including a predatory disconnection policy.

“Before I took the job I knew the issues on some level through articles I read in the press overseas,” she said. However, since coming to Jamaica, Tomblin said she has spent the last 30 days asking questions and listening.

“It’s not until I got here and started meeting with the stakeholders, regulators, customers and most significantly, our employees that I got the gravity of the issues we are facing,” she admitted. “During that time my overall focus was on listening… I did not know the intensity of emotion against the JPS.”

Tomblin’s initial apprehension about her JPS troubleshooting job was slowly being justified, leaving her to comment that she has never seen an electricity company facing such difficult and complex set of challenges.

But despite being taken somewhat by surprise, interacting with Jamaicans is not new to the Texan who revealed that she first visited the island some 15 years ago on vacation, and has returned on cruise ships a few times after. She recalls her first trip as a “pleasant experience”.

“It was just before the birth of my first child,” she shared.

Leaving the confines and protection of a Montego Bay all-inclusive hotel, Tomblin and her husband used public transportation to move around the island “getting to know the people”.

“We took a cab to James Bond Beach (St Mary) and spent almost the entire day,” she said. “[There was ] even teaching a young child how to swim.”

At that time Tomblin hadn’t the slightest inkling that she would have returned to Jamaica as a resident and would have lost her anonymity in the hot seat as boss of a troubled JPS.

“When we were here then we could move around and not be identified, now everywhere I go they say ‘that’s the JPS lady’,” Tomblin remarked. “People feel they know me and will talk to me. The impression of JPS is not positive but the good thing is that they talk to me,” she reflected.

At her appointment JPS described Tomblin as having “extensive industry knowledge, strong business strategy and operations experience, as well as customer service expertise”, which will be to the benefit of all its stakeholders.

And given her expressed, strong leaning to customer service and experience as a troubleshooter, Tomblin was clear about what she wants for the JPS.

“You can teach people engineering… but you can’t teach people how to build trust, how to be intimate with stakeholders, we are focusing a lot on that on that right now — being impeccable with your word.”

Tomblin said with passion that when she saw the JPS mission statement in the company’s head office she hoped they were not mere words.

“I have taken some steps not to place words on the wall and not mean it,” she quipped.

“You see so many people wanting the same thing, I see one factor where we can all get together,” she said of her new task.

To that end the JPS chief says she is establishing focus groups to find out “how we (JPS) got to this position”. She admits though that the loss of customer confidence in the JPS has posed a major problem but feels everybody genuinely wants JPS to be successful.

“When you’ve lost faith in something it’s hard to get it back,” she commented.

“You see a situation, so many people have the same target but approaching it in a piecemeal way,” she added.

How long Tomblin stays in Jamaica is totally up to shareholders in her company, she said, adding that her contract ends in two years.

Before her JPS appointment, Tomblin, who holds a Master of Business Administration from New York University, was regional vice-president of GDF SUEZ Energy Resources, with responsibility for leading the company’s market, competitive and regulatory strategy in Pennsylvania, Maryland, New Jersey, Delaware and Washington, DC.

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THE PORTIA Simpson Miller administration has reneged on its promise to abolish general consumption tax (GCT) on electricity.

Making his opening presentation in the 2012-2013 Budget Debate in the House of Representatives yesterday, Finance Minister Dr Peter Phillips announced changes to the way in which GCT is to be charged.

The minister said that, as of June 1, no GCT will be charged on the first 300kWh of electricity consumed, up from 200kWh. However, the tax will move from 10 to 16.5 per cent. The measure is expected to earn the Government $430 million this fiscal year.

In the general election campaign last year, Simpson Miller declared that her administration would remove GCT on electricity if her People’s National Party was elected to form the government. The promise was also contained in her party’s election manifesto.

Yesterday, Phillips told the House that of the approximately 500,000 JPS residential customers, 377,000 consume less than 200kwh of electricity.

He said the new tax directives will result in 90 per cent of JPS customers not paying GCT on light bills, up from the initial 76 per cent.

“The proposed measure should relieve approximately 80,000 additional residential customers from the payment of GCT on their electricity bill at the new threshold level of 300kWh, leaving only 52,000 residential customers subject to GCT,” Phillips said.

Just last month, Minister of Science, Technology, Energy and Mining Phillip Paulwell said Government intended to honour its election promise to roll back the consumption tax on electricity usage.

“There is a commitment that was given to the people of Jamaica which we intend to fulfil,” Paulwell said during a sitting of the House of Representatives.

Proposal questioned

North East St Catherine Member of Parliament Gregory Mair, who had tabled questions of Paulwell in the House, had suggested that the Government seek to raise the threshold to 300kWh instead of rolling back the tax.

Relying on data provided to the House by Paulwell, Mair said only eight per cent of residential consumers would not benefit if the threshold was increased to 300kWh.

“That would mean that 92 per cent of residential consumers would not pay GCT and the total amount of GCT collected would reduce only by $250 million,” Mair had argued.

http://jamaica-gleaner.com/gleaner/20120525/lead/lead7.html

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Simpson Miller
Simpson Miller

Daraine Luton, Senior Staff Reporter

DESPITE DECLARING in its election manifesto that it would “remove the general consumption tax (GCT) on electricity charges to ease the burden caused by electricity bills,” finance minister Dr Peter Phillips is insisting the People’s National Party (PNP) has delivered on its commitment to Jamaicans.

Phillips, the country’s finance minister, who served as campaign director for the PNP in the last general election, on Thursday announced in Parliament a 300 kWh threshold on electricity consumption above which GCT would be charged.

“A commitment was given in relation to GCT and by raising the threshold, we have in fact relieved all except the highest consumers of electricity,” Phillips said.

The PNP, in its manifesto, listed the rollback of GCT on electricity among 18 steps to full people power.

Yesterday, Phillips argued that 90 per cent of residential customers of the Jamaica Public Service would not pay GCT on their electricity bills. He said that the move by the Government would provide protection for the working poor and marginalised.

Previously, the threshold on electricity consumption was 200 kWh. Phillips also announced that the GCT on electricity would increase from 10 to 16.5 per cent.

In the meantime, Phillips argued that the increase in the rate of GCT would not impact businesses.

“All businesses can in fact claim their GCT payments back so that for businesses that are registered taxpayers for GCT, they are able to claim back their GCT payments, so on that basis, we have fulfilled a commitment that was given to the country,” Phillips said.

PM snaps

PNP President Portia Simpson Miller, now prime minister, repeatedly snapped at suggestions that the proposal for a rollback of GCT on electricity was not properly thought through.

“Everything we say from our platform they criticise,” she said, while adding that she has come to accept the criticisms of the “uncharitable and the unjust”.

“My platform will promise nothing that we are not sure we can deliver,” Simpson Miller said in St Thomas.

Yesterday, the minister of finance said “during the election campaign, we would not have a sense of how dire the public finances of the country was at the time”.

He added: “We have a simple choice, we could remove it, including at the highest end consumers, or we could try to rescue those same high-end consumers by rescuing Jamaica.

http://jamaica-gleaner.com/gleaner/20120526/news/news5.html

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The Office of Utilities Regulation (OUR) and the Jamaica Public Service Company (JPS) came out swinging over the past two weeks in rebuttals to an article I wrote that was published in the April 22, 2012 issue of

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05/24/2012
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Jamaica continues to combat its energy challenges by drilling for gas and oil.

A shift toward nuclear power is also a possibility.

That

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Oil prices dropped near their lows for the year following warnings of a “severe recession” in Europe and an apparent easing of tensions over Iran’s nuclear program.

Benchmark US crude on Tuesday lost 91 cents to end the day at US$91.66 per barrel in New York while Brent crude fell by 40 cents to end at US$108.41 per barrel in London.

Both contracts hit a low for 2012 on Friday at US$91.48 and US$107.14, respectively.

Oil has declined almost every day this month as elections in Greece and France threatened existing plans to fix the eurozone economy. A top economist for the Organization for Economic Cooperation and Development warned Tuesday that the eurozone could fall into recession this year if leaders fail to stimulate the economy.

Stunt growth

If that happens, it would stunt growth in world oil demand at a time when supplies are expanding.

Fears of a protracted standoff with Iran had helped push benchmark crude near US$110 per barrel in February. Prices have since fallen below levels of early November, when the United Nations first warned of a potential nuclear threat from Iran.

Uninterrupted Iranian exports could boost world oil supplies to an average of 89.15 million barrels per day, according to the latest projections from the Energy Information Administration. That would be more than enough to meet world demand.

In other futures trading, natural gas added 9.8 cents, up 4 per cent, to finish at US$2.707 per 1,000 cubic feet.

Natural gas prices have jumped by 42 per cent since hitting a 10-year low on April 19 as supplies declined.

Heating oil and wholesale gasolene were both flat, ending the day at US$2.8614 and US$2.937 per gallon, respectively.

AP

http://jamaica-gleaner.com/gleaner/20120523/business/business5.html