March 2015
The state-owned National Water Commission (NWC), Jamaica’s largest consumer of electricity, said that savings from its energy bill are being passed on to consumers.
Lower oil prices has resulted in cheaper electricity bills from Jamaica Public Service Company. NWC’s monthly bill has fallen to about $400 million at present.
“Yes, the NWC has been positively impacted by the reduction in oil prices. Our bills from JPS have gone down to just over $400 million per month, whereas before it was hovering above $500 million per month and in some instances it had exceeded $600 million,” Charles Buchanan, public relations manager at the NWC told Sunday Business.
Buchanan said that for most of calendar year 2014 the NWC, and by extension its customers, would not have benefited from the reduction in energy prices because for most of that time electricity rates were still very high. However, both the company and consumers started seeing the benefits since November 2014.
Buchanan explained that there is a mechanism built into the NWC’s tariff which is adjusted based on changes in the company’s three most significant costs: the cost of energy based on the electricity bills, the foreign exchange rate given that about 70 per cent of its operations involves purchases of items such as chlorine, fittings and meters; and the Consumer Price Index, which relates to other inputs.
“Those three things together are considered under the Price Adjustment Mechanism which customers see on their bills as PAM,” he said.
“Let’s assume that they are all going in the same direction, whenever they change it will cause customers’ bills to change in that same direction.”
Buchanan said each of the three elements are weighted by the Office of Utilities Regulation and that the size of their adjustments would determine the impact on PAM.
“So let’s say the energy price is going down and by itself would result in a reduction in the PAM, but the CPI and the exchange rate are going in the opposite direction, depending on how significant the movements are, whether the exchange rate changes are small or great or whether the energy cost reduction is small or great, as well as the relative weighting of those components it will determine whether PAM comes out on the net as a positive or negative movement,” he said.
Significant Movement
“But I can tell you that the movement in the energy prices has been significant enough to have overcome any other contrary movement in the CPI and or foreign exchange rate over recent months. As a result, for the last few months the price adjustment mechanism for the customers has been beneficial to the customers in the sense that it is represented on their bills as a deduction from their water charges,” he added.
NWC has some 1,000 locations across Jamaica that require electricity.
In 2011, its annual bill to JPS was $5.503 billion; $5.904 billion in 2012; $6.285 billion in 2013, and $6.464 billion in 2014.
“In all instances there was a continuous climb in the dollar value of the energy costs,” said Buchanan.
However, the NWC has put in place energy management initiatives which resulted in its kilowatt per hour usage hovering at around the same place or slightly declining.
For example, in 2011 the NWC’s kilowatt/hour usage of energy was 197.17 million, but it moved downward to 188 million in 2014. “This is despite the fact that we had put in a number of new water supply and waste water systems,” the NWC spokesman said.
Buchanan adds that there was a four per cent decrease in the NWC’s energy consumption in 2014 when measured against 2011. Consequently, the commission was expecting a four per cent reduction in its electricity bill, but instead there was a three per cent increase in the energy cost to the NWC over the period.
Asked about the percentage reduction to customers over the past three months, Buchanan said it was difficult to give a figure due to PAM being a combination of three elements.
“It’s a little complicated to give an exact figure … but definitely the bills have shown declines,” he said.
Jamaica is to be darkness-free by 2017. Well, almost free of darkness, according to Phillip Paulwell, the energy minister who says the Government is prepared to use solar energy to power houses in remote rural areas that are not currently connected to the grid.
“We expect that, by 2017, some 99.99 per cent of the country will be covered,” Paulwell told The Gleaner yesterday.
At present, 95 per cent of the country is covered, which Paulwell said is due in the main to the role of the Rural Electrification Programme (REP) established in the 1970s.
“We believe that we are in sight of completing the work of REP, based on what we have left to be done. I believe that sometime during this year or the first year during the new term, we will be able to say 99.99 per cent, because you could never get to 100 per cent, has access to electricity,” Paulwell said.
The Government has allocated $374.7 million in this 2015-2016 Budget for the REP to carry out its functions. The target includes the construction of 30 kilometres of pole line extensions in 10 parishes and the wiring of 1,000 houses to facilitate formal contracts with the Jamaica Public Service Company.
Paulwell told The Gleaner yesterday that, by 2017, “we should no longer have REP in the way we do now”, adding that if the Government finds it too challenging to run power lines into communities, it will use solar.
“For those areas that are too far away from the grid, we will be utilising renewable energy. We are going to be putting up solar facilities for the remote areas,” the minister said.
Paulwell said the newly formed National Energy Solutions, the company which is to replace the REP, will be
targeting housing schemes as one area from which it will earn fees for doing installation works.
It is projected that REP will earn $230 million from services this year, and will get another $100 million from the Petroleum Corporation of Jamaica.
More Work To Do
“In addition to the extensions that we are doing, we will do those most difficult areas using renewables, but thereafter, the focus of REP will be shifted to an energy-service company, and among their main duties will be to explore the possibility of assembling solar PV (photovoltaic) systems in Jamaica and also to assist with dealing with the theft of electricity and the regularisation of those areas where theft is very pronounced. A lot of the houses need to be wired and certified properly; we are going to give them that mandate,” he added.
But even as the Government prepares to flip the switch on the REP, some rural members of parliament believe that the entity still has a bit of work to do.
“From 2007, I have done about five REP projects. I have about five or six pending, plus new ones that have come in that have not been submitted as yet,” West Portland MP Daryl Vaz told The Gleaner. “I have always felt that REP is one of the best government interventions because of the number of people’s lives it impacts.”
Vaz said the five projects implemented cost $12 million, $5 million of which was contributed from his Constituency Development Fund.
Vaz further said that another 11 projects are pending, six of which, the REP said, would require funding of $9 million. The other five are awaiting estimates.
The MP said that this year’s allocation, which is way above the $231 million provided in the current fiscal year, is a drop in the bucket, arguing that when the Jamaica Labour Party formed the administration between 2007 to 2011, there was a major problem finding money to fund projects.
“The demand is so much more than the budgetary allocation. I would love to accept Minister Paulwell’s projection of 2017, but I don’t see it [as] possible. I don’t think it is realistic, unless it is that they have found some money somewhere,” Vaz said.
Paulwell said the projects that are now being done are “remote, very far from the grid”.
“Some years ago, when we did an electricity ceremony to turn on electricity, one project would have 500 customers. But now because of the remoteness of them, for one project you have 10, 15 customers because they are so dispersed in remote areas,” he explained.
But Dorrett Abrahams, who resides in the beachfront community of Albion Heights, which lies between Yallahs, St Thomas, and Bull Bay, St Andrew, said that despite the area being part of a development which began in the 1960s, residents are yet to get electricity.
“There is no electricity there, and we are talking about 2015,” she said. “REP came through and they said the the ground is tough and stony and that it is going to cost a lot of money to carry the electricity and they don’t have any money,” she added.
Jamaica is to be darkness-free by 2017. Well, almost free of darkness, according to Phillip Paulwell, the energy minister who says the Government is prepared to use solar energy to power houses in remote rural areas that are not currently connected to the grid.
“We expect that, by 2017, some 99.99 per cent of the country will be covered,” Paulwell told The Gleaner yesterday.
At present, 95 per cent of the country is covered, which Paulwell said is due in the main to the role of the Rural Electrification Programme (REP) established in the 1970s.
“We believe that we are in sight of completing the work of REP, based on what we have left to be done. I believe that sometime during this year or the first year during the new term, we will be able to say 99.99 per cent, because you could never get to 100 per cent, has access to electricity,” Paulwell said.
The Government has allocated $374.7 million in this 2015-2016 Budget for the REP to carry out its functions. The target includes the construction of 30 kilometres of pole line extensions in 10 parishes and the wiring of 1,000 houses to facilitate formal contracts with the Jamaica Public Service Company.
Paulwell told The Gleaner yesterday that, by 2017, “we should no longer have REP in the way we do now”, adding that if the Government finds it too challenging to run power lines into communities, it will use solar.
See more details at jamaica-gleaner.com
