February 2015

February 11, 2015 marks five years in space for NASA’s Solar Dynamics Observatory, which provides incredibly detailed images of the whole sun 24 hours a day. Capturing an image more than once per second, SDO has provided an unprecedentedly clear picture of how massive explosions on the sun grow and erupt ever since its launch on Feb. 11, 2010. The imagery is also captivating, allowing one to watch the constant ballet of solar material through the sun’s atmosphere, the corona.

In honor of SDO’s fifth anniversary, NASA has released a video showcasing highlights from the last five years of sun watching. Watch the movie to see giant clouds of solar material hurled out into space, the dance of giant loops hovering in the corona, and huge sunspots growing and shrinking on the sun’s surface.

The imagery is an example of the kind of data that SDO provides to scientists. By watching the sun in different wavelengths – and therefore different temperatures – scientists can watch how material courses through the corona, which holds clues to what causes eruptions on the sun, what heats the sun’s atmosphere up to 1,000 times hotter than its surface, and why the sun’s magnetic fields are constantly on the move.

Five years into its mission, SDO continues to send back tantalizing imagery to incite scientists’ curiosity. For example, in late 2014, SDO captured imagery of the largest sun spots seen since 1995 as well as a torrent of intense solar flares. Solar flares are bursts of light, energy and X-rays. They can occur by themselves or can be accompanied by what’s called a coronal mass ejection, or CME, in which a giant cloud of solar material erupts off the sun, achieves escape velocity and heads off into space. In this case, the sun produced only flares and no CMEs, which, while not unheard of, is somewhat unusual for flares of that size. Scientists are looking at that data now to see if they can determine what circumstances might have led to flares eruptions alone.

Goddard built, operates and manages the SDO spacecraft for NASA’s Science Mission Directorate in Washington, D.C. SDO is the first mission of NASA’s Living with a Star Program. The program’s goal is to develop the scientific understanding necessary to address those aspects of the sun-Earth system that directly affect our lives and society.

This video is public domain and can be downloaded at: http://svs.gsfc.nasa.gov/goto?11742

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KINGSTON, Jamaica – The Office of Utilities Regulation (OUR) says it has directed the Jamaica Public Service Company Limited (JPS) to refund to customers over J$973 million that it unilaterally imposed as foreign exchange adjustments on fuel supplied by Petrojam Limited from March to December 2013.

The directive, which is effective February 16, 2015, was issued following consultations with JPS. The sum taken from customers, totalling J$973,372,164.14, was in contravention of Exhibit 2, Schedule 3 of the Amended and Restated All-Island Electric Licence, 2011.

JPS has been directed to submit, within seven days from the effective date of the directive, details of how it proposes to effect the repayment, including the commencement date by which the refund will be made to customers, OUR explained in a release.

Customers are to be fully refunded within six months of the effective date of the directive, the organisation said.

OUR noted that the directive follows a decision taken by JPS to pass through to customers, foreign exchange adjustments on payments for fuel supplied by Petrojam Limited, from March to December 2013.

This was done without any approval by the OUR.

The OUR requested clarification from the JPS regarding the inclusion of a line item called “FX adj on Petrojam Fuel” in the fuel oil statements for the relevant period.

During the period, this impacted the fuel and IPP charge which appears as a line item on customers’ bills.

The OUR said that having received JPS’ explanation for making the adjustments, considered the matter and concluded that JPS had no authority under the existing regulatory framework to unilaterally impose the additional costs on customers.

The OUR said it will continue to be vigilant in safeguarding the interest of consumers, while ensuring an equitable environment for investors in our utility services.

 

JamaicaGleaner

OUR still deciding whether to appeal or redesign programme

Avia Collinder, Business Reporter

Jamaica’s electricity tribunal has effectively sent utilities regulator, OUR, back to the drawing board to redesign the pricing structure plan for the wheeling of power through Jamaica Public Service Company’s network.

The Office of Utilities Regulation has said it may appeal the ruling.

JPS had contested the wheeling prices set by the OUR as inadequate and in breach of its licence, and Chairman of the Electricity Appeals Tribunal, Justice Paul Harrison, issued a ruling in November 2014 that sided with the power utility. Justice Harrison described the pricing structure as ‘irrational and flawed’.

OUR had intended to introduce electricity wheeling in 2013, but the programme was put on hold after JPS’ legal challenge.

The regulatory agency said this week that it was still reviewing the tribunal’s decision but expected to wrap up the assessment by the end of March.

Essentially, JPS had argued that wheeling prices should be set around the same time as the rate determination for electricity charges – the latter was decided last month – having noted that the 2013 wheeling rates were based on stale data.

JPS also argued that the approved wheeling charges were in breach of Condition 12 of its licence, neither were they guided by the cost of service study (COSS) conducted by the power utility.

“We are still assessing the effect and implications of the ruling,” Ansord Hewitt, the OUR’s director of regulation, policy, monitoring and enforcement, told the Financial Gleaner.

The review will determine the regulator’s next step.

“If, for example, it decides to appeal the decision then the status quo remains,” said Hewitt. “On the other hand, if it decides not to appeal the next step is to direct JPS to do a cost of service study stipulating the framework for it. We will have another round of consultations, then determine a system including charges and, thereafter, implement,” he said.

Though a number of local com-panies have expressed interest in wheeling electricity, no applications have been made so far to the OUR.

As defined in the text of the Tribunal’s decision: “Wheeling is a method by which a grid operator, for a price, allows another party to send electrical energy over the grid operator’s transmission and distribution system, from a location at which the party generates the energy, to a location where it will be consumed.”

The wheeling regime was introduced in Jamaica by the amendment of Condition 12 of JPS’s licence in 2011.

To qualify for a wheeling licence, lasting 10 years, the applicant must be a self-generator with consumption facilities of 25kVA.

The OUR in 2013 determined annual wheeling rates at an average of US$105,312 per MW for primary distribution and US$53,545 for secondary distribution on a non-locational basis.

The regulator also estimated rates for 14 actual JPS customers at different locations across Jamaica, which ranged between US$83,100 per MW and US$629,900 per MW.

JPS argued on appeal that the wheeling charges were not consistent with the existing tariffs and price controls, in that the charges would not be revenue neutral to the utility. It also objected to the OUR’s use of a Modern Equivalent Asset Valuation model for setting wheeling rates, instead of actual costs, and argued that the structure created by OUR would result in tariffs that discriminate by location.

The Electricity Appeals Tribunal, after hearing from expert witnesses on both sides, ruled “the OUR acted unlawfully in producing its own COSS [cost of service study], albeit with some 2009 data from JPS, in breach of Condition 12 and therefore, in that respect, its determination is flawed”.

Harrison ruled that the OUR’s decision not to consider JPS’ COSS data, which was available to it in June 2013, a month before its wheeling determination, was “irrational”.

He further noted that the OUR, being a statutory authority with powers and functions conferred by law and the power utility’s licence, could not “arrogate to itself powers that are not conferred on it”, and that it had no common law powers nor a legal basis or authority to conduct its own COSS.

Additionally, the wheeling charges proposed by the regulator were “not consistent with tariffs and the price controls as approved by the OUR,” said Justice Harrison.

“… It was irrational for the OUR to issue the Determination Notice for the reason that it did. The said notice is accordingly flawed and irrational,” he said.

avia.collinder@gleanerjm.com

Jamaica Gleaner

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Enjoying those prices at the pump? You might not want to get used to them. A former top oil executive says the price of gas at the pump could double by the end of the year.

In an interview with CNBC, former Shell Oil President John Hofmeister predicts that U.S. oil could skyrocket from the current levels under $48 a barrel to $80 by this fall, just as consumers are getting used to the windfall from lower gas prices. That would force gas prices to double, from the current $2 to a whopping $4 by next winter.

The reason, he says, is the oil companies are masters of the simple economics of supply and demand.

“The industry is the best in the world at cutting costs when they have to reduce spending. What’s happening is we’re shutting down drilling rigs,” Hofmeister said. “Not completing the wells that have just been drilled. And we’re going to eat off the surplus oil out there probably by mid-year.”

Read MoreFuel is cheaper, so let’s hike gas tax: Former governor

Hofmeister, who ran Shell Oil USA from 2005-08, retired and foundedCitizens for Affordable Energy. The non-profit organization seeks the growth of natural gas as a transportation fuel alternative to oil.

He says U.S. producers have idled 500 rigs over the past four months as oil prices plunged. He says the result of that production slowdown eventually will be felt at the pump. This month, Baker Hughes reported that U.S. drillers had taken a record number of oil rigs out of serviceamid the price slump. Last week alone, oil rig counts tumbled by 55 to 1,366.

Five dollar a gallon gas?

A gas station advertises gasoline for $1.68 a gallon in Dellwood, Mo., Jan. 20, 2015.

Hofmeister predicts gas prices could pass the $3-a-gallon range in September and October. By December and next January, he says, gas prices will be nearing $4 a gallon.

Looking further into the future, the former oil exec sees prices rising to “$5 gasoline in the U.S. as we approach the end of the decade.”

Although the Republican-controlled Senate passed the Keystone XL pipeline this week, Washington observers say President Barack Obama is certain to veto it.

Read MoreSenate passes final Keystone bill: measure faces Obama veto

Hofmeister says the Keystone XL pipeline will have no impact on fuel prices in the near term. And he tells CNBC he doesn’t expect it to pass during Obama’s tenure.

“Whoever is the next president, Democratic or Republican, must look at the needs of the nation 20 to 30 years down the road,” he added.

While still a fossil fuel, natural gas has half of the carbon in the molecule that an oil molecule has, Hofmeister explained. “It’s a reduction in fossil fuel emissions, or carbon emissions, by switching to natural gas.”

Hofmeister sees natural gas being turned into four types of alternative fuels. “You can have ethanol and methanol for passenger cars,” he said. “CNG (compressed natural gas) and LNG (liquefied natural gas) for trucks and trains. Natgas “takes the pressure off oil. And it also ends the need for the U.S. to import oil.”

Hofmeister says that unless the U.S. reduces oil consumption, “we will face inevitable and perpetual volatility in oil, especially as we approach the end of the decade.”

CNBC
On the Money airs on CNBC Sundays at 7:30 pm, or check listings for air times in local markets.

Despite recent hurdles, the Kelly Tomblin-led Jamaica Public Service (JPS) is indicating that it is determined to increase its contribution to the burdened national grid and help stave off threats of power outages in the years ahead.

The light and power company has shrugged off the shock of the Office of Utilities Regulation’s (OUR) disapproval of its request for a rate hike and is moving ahead with plans to erect a 190-megawatt (MW) power plant.

Shedding light on the work of the Electricity Sector Enterprise Team (ESET), chairman Dr Vincent Lawrence told journalists yesterday that his group has its eyes firmly set on the addition of 380MW to the national grid by 2017.

Addressing a press conference at the Office of the Prime Minister, Lawrence revealed that Cabinet on Monday approved the construction of the 190MW power plant along with two others to increase generating capacity to the island by 380MW.

“The JPS has exercised its right of first refusal to replace obsolete generating capacity by the construction and installation of a 190MW gas-fired, co-generation power plant at Old Harbour,” said Lawrence.

He said the JPS had agreed to a power tariff of not more than US12.89 cents to facilitate the construction.

“ESET has recommended and Cabinet has given approval for a letter to the JPS authorising the development of 190MW of generating capacity and the construction of a terminal in Old Harbour,” said Lawrence.

He disclosed that Cabinet also approved the construction of a 140MW gas-fired, co-generation plant by Alpart Venture and another 50MW for Jamalco Venture.

Presenting an update to journalists during a press conference after the submissions were made to Cabinet yesterday, Lawrence said the JPS would also be forging ahead with the upgrading of its Bogue plant, which generates 50MW, which is not factored into the added generating capacity.

For Bogue, Lawrence said the proposal is to convert the feed stock to gas, making the retrofitted power plant a 115MW gas turbine co-generation power plant.

US$15 MILLION REQUIREMENT

Lawrence pointed out that the JPS requires capital expenditure of US$15 million for the conversion of the Bogue power plant to be completed by the end of 2015.

He disclosed that ESET had been forced to delay its due diligence on the Jamalco project because the new majority partner, the Noble Group, is finalising its own analysis of the project in order to decide whether it will be making amendments.

Lawrence said Cabinet also agreed with ESET to subject the existing co-generation proposal on the 50MW of coal-fired generation at Jamalco to further analysis before it provides more definite recommendations on the project.

The new principals of Jamalco have promised that their position will be forthcoming by the end of the month.

Lawrence said ESET has continued with a number of stakeholder consultation meetings and discussions with key players in the electricity market.

These comprise the JPS; the OUR; the bauxite alumina sector (Jamalco and Alpart); the Ministry of Science, Technology, Energy, and Mining; the Inter-American Development Bank; and Independent Power Producers (IPPS).

Lawrence said ESET continued to receive assistance from the World Bank, which has provided expertise in analysing technical and financial submissions from JPS, Alpart, and Jamalco, which are planning to build, own, and operate the proposed power plants.

He said ESET had also conducted assessments of the gas market, including trends, costs, shipping size, among other variables, and has conducted comparative studies of electricity policy and framework across the region.

Among other recommendations approved by Cabinet are the review of the Amended and Restated All-Island Electricity Licence (2014), with the goal of facilitating viability, reliability, and investment in the electricity sector.

gary.spaulding@gleanerjm.com

Jamaica Gleaner