The Office of Utilities Regulations (OUR) yesterday gave energy firms more than one month’s extension to July 29 to submit final proposals for the 360-megawatt project.

The original date was June 17 for the companies vying for the project, including Armorview Holdings, Azurest-Cambridge, Energy World International Limited, the Jamaica Public Service Company and Optimal Energy.

The OUR is also extending the time frame to select the highest ranked entities from July 12 to August 29. The agency will subsequently finalise negotiation of the project agreements by November 21.

Construction of the plant is expected to begin January 20, 2014, while commissioning of the new capacity is set for two years later on January 2016.

The 360MW project, which is expected to introduce LNG to the fuel, is the primary means by which Government plans to slash energy costs by about one-third. In the process, it will replace old generating units, some of which were commissioned four decades ago.

business@gleanerjm.com

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The Office of Utilities Regulations (OUR) yesterday gave energy firms more than one month’s extension to July 29 to submit final proposals for the 360-megawatt project.

The original date was June 17 for the companies vying for the project, including Armorview Holdings, Azurest-Cambridge, Energy World International Limited, the Jamaica Public Service Company and Optimal Energy.

The OUR is also extending the time frame to select the highest ranked entities from July 12 to August 29. The agency will subsequently finalise negotiation of the project agreements by November 21.

Construction of the plant is expected to begin January 20, 2014, while commissioning of the new capacity is set for two years later on January 2016.

The 360MW project, which is expected to introduce LNG to the fuel, is the primary means by which Government plans to slash energy costs by about one-third. In the process, it will replace old generating units, some of which were commissioned four decades ago.

business@gleanerjm.com

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Paul Facey, vice-president of Pan-Jamaican Investment Trust. - Winston Sill/Freelance Photographer
Paul Facey, vice-president of Pan-Jamaican Investment Trust. – Winston Sill/Freelance Photographer

Pan-Jamaican Investment Trust is eyeing the energy market for its next venture, saying Government’s plan to boost the supply of renewables offers new revenue opportunities for the company.

“We want to participate in the 115 MW request for proposals,” said Paul Facey, director and vice-president of investments.

“We see the economic benefits in bidding … It will bring a steady cash flow to the group,” he told

Opposition spokesman on Industry, Commerce and Energy Gregory Mair is proposing that the administration make it mandatory for all government buildings to be fitted with solar photovoltaic systems.

“Every government building must have solar panels energising their lights, fans and other equipment. Not only will it bring savings in foreign exchange used by JPS to purchase fuel, but it will also reduce the electricity bills of Government and stimulate the growth of an industry of which Jamaica could become the Caribbean leader,” Mair pointed out during his contribution, last week, to the Sectoral Debate in Parliament.

He also wants the Government to introduce policy to make it compulsory for solar photovoltaic systems to be installed in government-related schemes.

“Let the Government drive demand in solar energy. If done properly, we could see an industry where we have solar photovoltaic panels and solar heating assembly plants exporting to the Caribbean and, by extension, the world,” he added.

Discussing how this project could become a reality, Mair said the Government should make the Petroleum Corporation of Jamaica (PCJ) more efficient.

“As we are aware, the PCJ is funded by the one per cent commission earned from the sale of fuel to Petrojam. The PCJ does not require all this funding and the majority of it should be dedicated to building this industry. It is a win-win all around,” Mair explained.

Turning to the PetroCaribe agreement, Mair argued that Jamaica could pay for fuel purchased under this accord with goods made locally, not only manufactured items but also produce.

According to Mair, Article IV of the PetroCaribe agreement states, among other things, that, “With regard to deferred payments, Venezuela shall be able to accept that the partial payments be done with products, goods and/or services, previously agreed by the parties, based on preferential rates proposed by the Government of Jamaica.”

He noted that Venezuela imported a lot of products and Jamaica had failed to take advantage of this clause of the PetroCaribe deal.

“Our Government should meet with our counterparts in Venezuela, like many other countries have, and agree on the goods we will be selling them in exchange for their fuel. Once this is done, Government should encourage the establishment and expansion of the industries that will capitalise on this arrangement,” the opposition spokesman stated.

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Opposition spokesman on Industry, Commerce and Energy Gregory Mair is proposing that the administration make it mandatory for all government buildings to be fitted with solar photovoltaic systems.

“Every government building must have solar panels energising their lights, fans and other equipment. Not only will it bring savings in foreign exchange used by JPS to purchase fuel, but it will also reduce the electricity bills of Government and stimulate the growth of an industry of which Jamaica could become the Caribbean leader,” Mair pointed out during his contribution, last week, to the Sectoral Debate in Parliament.

He also wants the Government to introduce policy to make it compulsory for solar photovoltaic systems to be installed in government-related schemes.

“Let the Government drive demand in solar energy. If done properly, we could see an industry where we have solar photovoltaic panels and solar heating assembly plants exporting to the Caribbean and, by extension, the world,” he added.

Discussing how this project could become a reality, Mair said the Government should make the Petroleum Corporation of Jamaica (PCJ) more efficient.

“As we are aware, the PCJ is funded by the one per cent commission earned from the sale of fuel to Petrojam. The PCJ does not require all this funding and the majority of it should be dedicated to building this industry. It is a win-win all around,” Mair explained.

Turning to the PetroCaribe agreement, Mair argued that Jamaica could pay for fuel purchased under this accord with goods made locally, not only manufactured items but also produce.

According to Mair, Article IV of the PetroCaribe agreement states, among other things, that, “With regard to deferred payments, Venezuela shall be able to accept that the partial payments be done with products, goods and/or services, previously agreed by the parties, based on preferential rates proposed by the Government of Jamaica.”

He noted that Venezuela imported a lot of products and Jamaica had failed to take advantage of this clause of the PetroCaribe deal.

“Our Government should meet with our counterparts in Venezuela, like many other countries have, and agree on the goods we will be selling them in exchange for their fuel. Once this is done, Government should encourage the establishment and expansion of the industries that will capitalise on this arrangement,” the opposition spokesman stated.

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Kevin Richards, Sterling's vice-president of sales and marketing. - File
Kevin Richards, Sterling’s vice-president of sales and marketing. – File

Marcella Scarlett, Business Report

Sterling Asset Management Limited has been tapped to arrange US$50 million of financing for joint-venture partners Azurest Partners LLC and Cambridge Project Development Inc, if the companies emerge as the preferred bidder for the LNG-compatible plant, the local investment firm has confirmed.

Azurest-Cambridge is one of five bidders short-listed to bid on the project to develop and operate the power plant to supply the national grid.

The Office of the Utilities Regulation (OUR) announced new timelines for the project on Wednesday for construction of the plant to begin at the end of November and for it to be commissioned two years later in December 2015.

The other four short-listed bids as named by the OUR are Armorview Holdings Limited; Energy World International Limited; Jamaica Public Service Company Limited; and Optimal Energy.

The financing to be arranged by Sterling represents just seven per cent of the plant’s development cost.

Sterling’s vice-president of sales and marketing, Kevin Richards, said the Azurest-Cambridge investment is estimated at US$698 million, including working capital, reserves, capital expenditure, and associated project fees.

The targeted financing mix is 70 per cent debt and 30 per cent equity, with most of the funding to be raised outside of the Caribbean region, said Richards, referring to the entire US$698m project cost.

Sterling says it plans to target local institutional investors for the funds to be raised on behalf of Azurest-Cambridge.

“In the past, there have been a number of acquisitions or new investments by foreigners that did not have any local capital market participation, and we feel that a deal such as this would allow medium- to long-term investors more than sufficient return on investment relative to current market offerings,” Richards said.

Azurest-Cambridge has proposed a 388MW capacity power plant to be mounted on sea barges. The OUR tender is for 360MW.

The partners plan to leverage Azurest’s relationships with major US energy players and financial-services firms “gain easy access to the world’s cheapest supply of LNG,” the partners said in their project summary acquired by

GREGORY MAIR, the opposition spokesman on energy, is pushing for a level playing field in the pricing of heavy fuel oil sold by Petrojam to the bauxite industry as against the Jamaica Public Service (JPS), and, by extension, the Jamaican consumer.

In his contribution to the Sectoral Debate in Parliament on Tuesday, Mair contended that players in the bauxite industry purchased heavy fuel oil from Petrojam for 15 per cent less than the state-owned oil refinery sells to the light and power company.

“Why don’t we level the playing field, have a real competitive environment in the fuel sector and give JPS, and, by extension, the consumers of electricity, the same status as the alumina/bauxite producers,” Mair asserted.

According to Mair, the Bauxite and Alumina Industries (Encouragement) Act, exempts alumina and bauxite producers from paying customs duty or similar imposition on the importation of petrol fuel oil or diesel.

“Let JPS initiate a tender process where all providers of HFO/ADO (heavy fuel oil/automotive diesel oil) in the world will compete and where we will see the consumers of electricity benefiting from close to a 15 per cent reduction of the fuel cost, which would be approximately 10 per cent of our bills.

Bauxite industry enjoys reduced rates

I say this based on information I have in my possession. The bauxite industry purchases HFO 15 per cent cheaper than JPS,” Mair told his parliamentary colleagues.

He explained that the HFO used in the generation of electricity is purchased by JPS from Petrojam at a cost of some $6 billion per month.

Turning to electricity theft, Mair wants the crafting of legislation to impose stiffer fines on persons involved in the illegal act.

“The Government must sit down with JPS and agree on a clearly defined strategy for tackling the theft of electricity,” Mair said, noting that it was costing legal customers of JPS about $3 billion annually for illegal connections. The JPS is said to absorb a similar sum each year.

edmond.campbell@gleanerjm.com

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