Government Archives - Page 25 of 56

More Renewable Energy For Grid

August 26, 2015 Webmaster

Energy Minister Phillip Paulwell said yesterday that he expects renewable energy to comprise 12.5 per cent of the national grid by the end of 2016.

The Office of Utilities Regulation (OUR) has invited interested entities to submit proposals for the provision of new generating capacity from renewable energy sources up to 37 megawatts (MW) to the national grid.

Currently, six per cent of the national grid is supplied by renewables, and this is to increase with the addition of 78MW by March next year with the coming on stream of three new renewable projects.

The National Energy Policy has identified fuel diversification and the development of the country’s renewable energy sources as two of its main objectives. The policy sets a target of having 20 per cent of the country’s energy being generated from renewables by 2030.

“My own view now is that we should aim for 30 per cent. The 12.5 will be achieved next year and we will be the leading Caribbean country in terms of renewables,” Paulwell said.

SYSTEM CAPACITY

Light and power provider, the Jamaica Public Service Company (JPS), supplies consumers from an installed system capacity of approximately 945.1MW.

To date, the highest peak demand registered on the system was 644.4MW. In 2014, annual generation from renewable energy sources accounted for approximately six per cent of total system generation, with contributions of 2.5 per cent and 3.5 per cent from hydro and wind, respectively.

Meanwhile, Paulwell revealed that the net-billing arrangement is to be recommenced next month. The programme was suspended to undertake a review of the performance of the system and Paulwell said “all indications are that it has been doing very well and we, therefore, are going to resume”.

Net-billing is the system whereby the JPS buys excess power from its customers.

LICENCES ISSUED

More than 300 net billing licences have so far been issued by the energy minister, and the suspension of the system was undertaken to evaluate its success.

“We have not achieved the original target to get to 4MW of electricity being generated by that means and also we have not seen any degradation of the grid as a result,” Paulwell said.

But while the Government gets set to resume the net-billing arrangements, JPS has said that the regulatory authorities must institute a special cost system for persons who generate most of their own energy through renewable energy but are still dependent on the grid.

“If you come on for one hour, I have to do the same exact generation that I have to do if you are on for one day,” Kelly Tomblin, JPS president and CEO, told The Gleaner.

But Paulwell, responding to that charge, said “that is an argument that the OUR will have to address. Our policy is to encourage more and more renewables at the individual level.”

The Gleaner

Alternative Energy Energy Saving Government News Solar Energy

USDA Invests $63M In Renewable Energy And Energy Efficiency Projects

August 12, 2015 Webmaster

The U.S. Department of Agriculture (USDA) has announced $63 million in loans and grants for 264 renewable energy and energy efficiency projects nationwide.

USDA is supporting these projects through its Rural Energy for America Program (REAP), which was created by the 2008 farm bill and was reauthorized by the2014 farm bill.

These newly funded projects are expected to generate and/or save 207.8 million kWh of energy – enough to power more than 13,600 homes for a year.

“This funding will have far-reaching economic and environmental impacts nationwide, particularly in rural communities,” says Agriculture Secretary Tom Vilsack. “Investing in renewable energy and energy efficiency projects supports homegrown energy sources, creates jobs, reduces greenhouse gas pollution and helps usher in a more secure energy future for the nation.”

Eligible agricultural producers and rural small businesses may use REAP funds to make energy efficiency improvements or install renewable energy systems, including solar, wind, renewable biomass (including anaerobic digesters), small hydroelectric, ocean energy, hydrogen and geothermal.

Since the start of the Obama administration, USDA has supported more than 9,600 renewable energy and energy efficiency projects nationwide through REAP.

The next application deadline for REAP grants is Nov. 2. In the coming weeks, USDA will issue a notice of available funding with more details on how to apply.

Solar Industry Mag

Alternative Energy Government News

The US Installed More Than Twice As Much Solar and Wind As Fossil Fuel Electricity So Far In 2015

August 10, 2015 Webmaster

Throughout the entire first half of 2015, solar and wind energy accounted for 2,518 megawatts of new electricity generating capacity brought online in the US— some 65 percent of all new capacity added so far this year.

Coal accounted for a mere 3 MW during that time period, while natural gas accounted for 1,173 MW (there was no new oil). That’s less than half the amount of solar and wind energy added January to June. Wind alone, at 1,969 MW, was more than all fossil fuels combined.

Here are the full numbers from the Federal Energy Regulatory Commission’s latest Energy Infrastructure Update:

“With Congress now debating whether to extend the federal tax incentives for renewable energy sources, it is reasonable to ask whether the American public has gotten a good return on these investments to date,” Ken Bossong, Executive Director of the SUN DAY Campaign, said in response to the update. “The latest FERC data confirms that the answer is a resounding ‘Yes!’”

Despite the tangible economic and environmental benefits of their huge growth in recent years, the US solar and wind industries are still facing a looming threat due to uncertainty over federal tax incentives.

The Senate Finance Committee just approved a tax bill that would reinstate the wind production tax credit (PTC), which expired on January 1, 2014 after Senate Republicans basically killed it. ThinkProgress reports the renewed tax credit would be worth $10.5 billion over 10 years and would last through December 31, 2016.

Fossil fuels are estimated to receive $135 billion in federal subsidies over the next decade from the US government, so it’s understandable that investors are weary of the long-term prospects of wind and solar, which, despite on-again, off-again support from the federal government, still must fight for every bit of market share they can get.

The two renewable energy technologies combined still only represent less than eight percent of total installed capacity in the US, after all, compared to natural gas at 42.66 percent and coal still hanging on at 26.83 percent, per the FERC data.

Which is why environmentalists and wind energy supporters want Congress to go further by adopting a more long-term solution.

“Wind power is gaining strength but in the context of tax extenders, this Congress must extend the PTC and [the investment tax credit] for the longest possible time to avoid pushing American wind power off a cliff,” the American Wind Energy Association’s Jim Reilly told ThinkProgress.

The solar industry is expecting a surge in business as a variety of investment tax credits are set to expire at the end of 2016. Without any further action from Congress to promote the clean energy technologies of the future, however, the surge is guaranteed not to last.

DESMOG blog

Alternative Energy Government News Solar Energy

Obama’s clean power plan hailed as US’s strongest ever climate action

August 4, 2015 Webmaster

Hundreds of businesses including eBay, Nestlé and General Mills have issued their support for Barack Obama’s clean power plan, billed as the strongest action ever on climate change by a US president.

The rules, announced on Monday, are designed to cut emissions from power plants and have been strengthened in terms of the long-term ambition as originally proposed by the president last year, but slightly weakened in the short-term in a concession to states reliant on highly-polluting coal.

White House adviser Brian Deese said the Environmental Protection Agency (EPA) rules represented the “biggest step that any single president has made to curb the carbon pollution that is fuelling climate change”. The US is the world’s second biggest carbon emitter after China.

The rules are expected to trigger a “tsunami” of legal opposition from states and utilities who oppose the plans, which will significantly boost wind and solar power generation and force a switch away from coal power. Republican presidential hopefuls moved quickly to voice their opposition, saying they would be economically damaging.

But 365 businesses and investors wrote to 29 state governors to strongly support the rules, which they said would benefit the economy and create jobs.

Mindy Lubber, who is attending the launch ceremony of the rules on Monday and is the president of Ceres, a network of investors that organised the letter, said: “The clean power plan is the right measure at the right time. It’s a flexible, practical and economically sound blueprint to transition America toward a low-carbon future.”

Other signatories included Unilever, L’Oréal, Levi Strauss, Staples, renewable energy company SunEdison and Trillium Asset Management, which manages $2.2bn in assets. It is the largest group of businesses to support the rules so far.

The final rules propose a 32% cut in carbon emissions from power plants by 2030 on 2005 levels, up from the initial proposal of 30%. However states will only have to comply by 2022 rather than 2020 as originally proposed, and will be able submit their plans on meeting the targets by 2018 instead of 2017.

CO2 emissions from power plants fell 15% between 2005 and 2013, meaning the country is halfway to the target.

Monday’s version of the rules also gives an explicit boost to wind and solar power, angering the natural gas industry which will still be a large beneficiary of the switch from coal to gas-fired power plants, which produce much lower emissions.

America’s Natural Gas Alliance, a trade body, said it was “disappointed and discouraged” by the rules. The World Coal Association claimed the plan “will significantly increase the cost of electricity to American consumers.” The Solar Energy Industries Association, on the other hand, said the rules were “historic” and “critically needed”.

The new rules will give a “give a head start to wind and solar deployment”, according to a White House fact sheet. “Drive more aggressive investment in clean energy technologies than the proposed rule, resulting in 30% more renewable energy generation in 2030 and continuing to lower the costs of renewable energy,” it said.

Barack Obama, in a video address, emphasised the health benefits of reduced air pollution from coal plants, and a duty to future generations as reasons for the clean power rules.

“Power plants are the single biggest source of the harmful carbon pollution that contributes to climate change. But until now there have been no federal limits on the amount of that pollution those plants can dump into the air. Think about that,” he said.

Obama’s plan to bring in the rules to cut emissions from power plants – which account for a third of the US’s greenhouse gas emissions – date back to 2009 when the EPA declared carbon emissions a public danger, the first step towards regulating them.

The final rules are likely to be welcomed by the United Nations, which is hosting a climate summit in Paris at the end of the year to agree on a deal on post-2020 curbs on emissions, as well as financing to help poorer countries manage global warming. Laurent Fabius, the French foreign minister, issued a statement welcoming the regulations.

Andrew Steer, president and CEO of the Washington DC-based thinktank the World Resources Institute, said: “The clean power plan should reassure international partners that the US administration is determined to deliver the 26-28% emissions reductions promised for 2025.

“Our analysis suggests that this rule can be implemented without technical or financial impediment, and in a manner that is likely to promote more, not less, economic prosperity.”

Describing the rules as very important, Lord Stern, the author of an influential review of the economics of climate change, said: “It shows the determination of the world’s richest country to maintain better economic growth while also cutting greenhouse gas pollution. President Obama has recognised in particular the enormous damage caused by pollution from the burning of coal in power stations.”

Gina McCarthy, the EPA’s administrator, said she believed the agency was on strong legal grounds for defending the rules from the legal challenges they are almost certain to face.

“Over the next few days we will hear the same tired old plays from the old special interests playbook,” said McCarthy.

The Guardian

Alternative Energy Government

Will Hillary’s ‘Half A Billion Solar Panels’ Promise Send Billions To China?

July 30, 2015 Webmaster

Hillary Clinton’s newest campaign promise to install half a billion solar panels across the country has been praised by liberal media outlets and environmentalists, but could this pledge end up benefiting China?

On Sunday, Democratic presidential candidate Hillary Clinton promised to install half a billion solar panels by the end of her first term and get the U.S. to a point where it can generate enough green energy to power every home in the country.

“Through these goals, we will increase the amount of installed solar capacity by 700% by 2020, expand renewable energy to at least a third of all electricity generation, prevent thousands of premature deaths and tens of thousands of asthma attacks each year, and put our country on a path to achieve deep emission reductions by 2050,” Clinton’s website boasts.

While there’s no doubt U.S. companies and green energy interests would benefit from the “competitive grants and other market-based incentives” Hillary promises to implement under her plan, the deal will also be a boost to the oppressive Chinese government.

“Mrs. Clinton’s plan would be a huge boost to China and Taiwan, where over 70 percent of solar photovoltaics are made,” Daniel Kish, senior vice president of policy at the Institute for Energy research, told The Daily Caller News Foundation.

“It’s also a huge boon to Japan and Malaysia, who make the lion’s share of the remaining world production,” Kish said. “I’m not sure Americans are going to be comfortable with Chinese solar panels covering their houses, plugging into their electricity systems and taking their jobs as official government policy.”

Thanks to government subsidies, China is the world’s largest producer of solar panels, and could see huge benefits from increasing solar energy incentives in the U.S. A 2014 report by the European Commission found that “China and Taiwan together now account for more than 70% of worldwide production.”

“The majority of panels [in the U.S.] are manufactured abroad, with the plurality coming from China and many from other Southeast Asian countries and Korea,” a spokesman for the Solar Energy Industries Association told TheDCNF. “The imposition of tariffs on Chinese panels is beginning to have an effect on Chinese imports, however, and we’ve seen domestic production increase over the past six months as Chinese imports decline.”
China’s government heavily backed solar panel companies in the past few years to build solar panels for export to the U.S. and Europe. Chinese solar production boomed in response to increasing attempts by the Obama administration and European countries to increase solar energy use. Now seven in 10 solar panels in the world are made in China.

“U.S.-based module production is currently limited to about 1 GW in practice,” Finlay Colville, vice president at the solar research firm NPD Solarbuzz, told Salon in 2014. “This represented just 2.5 percent of global demand in 2013.”

About “half of the panels used in the U.S. last year came from China,” Salon reported, adding that “U.S. module production fell from 1,200 megawatts in 2011 to 541 megawatts in 2012 and bounced back up to 988 megawatts in 2013.” Chinese imports are projected to continue their decline due to steep tariffs the Obama administration put on Chinese solar panels.

It’s not just Chinese companies that would benefit, as Kish noted: Japanese and Malaysian companies are also manufacturing lots of panels. In fact, the increase in Malaysian solar panel production could largely be from Chinese companies building factories there to get around U.S. tariffs.

Chinese companies are finding ways around the U.S. tariffs, mainly by producing panels in other countries. Bloomberg News reports that “more than half the panel capacity Chinese producers plan to add overseas is in Southeast Asia.”

Solar energy giant JinkoSolar opened a massive solar panel factory with the capacity to make “500 megawatts of solar cells and 450 megawatts of panels a year.”

“Products from our Malaysian plant will be mainly exported to the U.S., but we’re eyeing global demand,” Sebastian Liu, JinkoSolar’s director of investor relations, told Bloomberg. “This isn’t temporary. JinkoSolar wants global manufacturing to avoid the risks posed by a single production location.”

Going forward, U.S. officials could expand tariffs against Chinese companies using other countries as launching points for solar panel exports. This would force solar installation companies to rely more on U.S. panel makers, but would also likely raise solar energy costs.

Clinton would have to increase subsidies for solar energy to get the 700 percent increase she promises, which will be made more difficult if tariffs make solar panels more expensive. The U.S. solar industry could still benefit from Clinton’s plan, but solar panel installers have complained that tariffs are already making panels more expensive and, therefore, less attractive to consumers.

“Keeping these stiff tariffs in place makes solar power less affordable, slows job growth and prevents more American homes, businesses and utilities from switching to clean solar energy,” Jigar Shah, president of the anti-tariff Coalition for Affordable Solar Energy, said in a statement on the Obama administration’s refusal to lower tariffs on Chinese panels.

“Despite booming solar employment, economically counterproductive tariffs have artificially made solar panels prices in the United States the most expensive in the world,” Shah said.

The Daily Caller

Electricity Energy Saving Government Jobs JPS News

JPS Inks New Gas Deal With American Company, Fortress Energy

June 19, 2015 Webmaster

Jamaica Public Service Company Limited (JPS) has inked a deal with US-based New Fortress Energy to provide a long-term natural gas solution for its power plants, starting with Bogue.

However, the power supplier is not yet saying which gas it has selected as fuel and the price at which it will be supplied.

JPS itself has formerly floated the idea of propane initially and a future migration to natural gas.

The power utility has also not disclosed which entity will be responsible for retrofitting the plant at Bogue, which currently uses diesel fuel but has the infrastructure that allows it to transform to gas fuel.

As indicated to the Electricity Sector Enterprise Team last year, JPS is to convert the 115MW gas turbine plant at Bogue in Montego Bay from automotive diesel oil initially to propane by the fourth quarter of this year. The conversion, it projected, would result in an approximate 40 per cent fuel-price reduction.

The current plant consists of three individual units: two combustion turbine generating units with a total capacity of 80MW; and one 40MW steam-generating unit. The two combustion turbines operate on diesel fuel but are capable of converting to natural gas.

JPS said in a February update posted on its website that an independent engineer had been retained for the project and that construction was expected to begin by the second quarter of 2015 and that the plant should begin operating on gas fuel by the first quarter of 2016.

The company said this week that the gas-supply agreement with Fortress would pave the way for work to begin on the infrastructure needed for the delivery of gas to Bogue by early 2016.

The parties are firming up their agreement, which they expect to finalise by the end of this month.

Government Approval

Kelly Tomblin, JPS’ president and CEO, said that the company had received the final sign-off from the Government, through the Electricity Sector Enterprise Team, for the project.

“JPS understands the importance of gas to long-term sustainable energy prices and is proud to be able to finally bring gas to Jamaica,” she said in a company-issued statement.

JPS said New Fortress Energy was selected from a list of eight bidders who had responded to JPS’ request for proposals earlier this year.

Wesley Edens, founder and co-chairman of the board of Fortress Investment Group, said his company was quoted as saying that his company planned to “help make Jamaica an energy hub for the Caribbean and Latin America”.

New Fortress Energy is part of the Fortress Investment Group, a diversified global-asset firm with approximately US$70 billion of assets under management.

Investment vehicles managed by affiliates of Fortress own one of the largest crude oil terminals in the United States, as well as the first liquefaction facility in Florida, from which the gas will be supplied to Jamaica.

JPS has already submitted its proposal for Bogue to the Office of Utilities Regulation. The power utility previously telegraphed that the Bogue project may cost about US$80 million.

JPS senior vice-president for generation and project development John Kistle said in February that the converted installation was likely to include new pipelines and storage facilities constructed by fuel suppliers who would want to recover their costs. The new infrastructure is also likely to require new terminal facilities for off-take and supply of gas.

Request for additional comment on the new Fortress partnership were unanswered up to press time.

Electricity Energy Saving Government JPS News

President Obama to help Caribbean reduce energy cost

June 19, 2015 Webmaster

KINGSTON, Jamaica – United States President Barack Obama says he is pleased with the level of talks between himself and Prime Minister, Portia Simpson Miller this morning, on a range of issues including security, energy and economic growth.

In his statement issued at the Office of the Prime Minister Wednesday following a bilateral meeting, the US president said energy was one of the main areas discussed as well as his country’s role in helping Jamaica and other Caribbean states reduce costs associated with it.

“People in the Caribbean despite having less resources, are paying significantly higher prices for energy. If we can lower those costs through the development of clean energy and increased energy efficiency, we could release a whole host of additional investment and growth. There are going to be a whole host of areas where the US can be helpful,” he said.

The commitment comes, even as Venezuela, backed by 29 countries, including four Caricom states, signed a letter which it issued to the United States embassy in that country, and which was carried in one local newspaper, calling on the president to withdraw the executive order which the White House issued earlier this month, labelling the oil-rich South American country a threat, and imposing new sanctions against it.

A number of Caricom countries, including Jamaica, now enjoy preferential arrangements through the PetroCaribe Agreement, under which they are allowed to buy oil from Venezuela, and repay a percentage of the cost up front. In Jamaica’s case, the balance must be repaid over 21 years, at one per cent interest. But, the International Monetary Fund (IMF) has cautioned such countries that there could be a negative impact on their economies if Venezuela’s external liquidity problems escalate.

In the meantime Jamaica’s prime minister said within the context of the government’s extended fund facility with the IMF, the leaders had “explored additional ways of imploring our trade and economic relations”, including in the area of energy security and renewable energy.

She also pointed out that one of the outcomes of the visit was the signing of a statement of intent between the countries, to pursue the development and deployment of energy-related technologies.

“We aim to encourage increased bilateral trade, boost the development of emerging technologies and industries and pave the way for future innovation in energy-related fields,” she said.

The US President leaves the island later today for the Seventh Summit of the Americas, in Panama.

Alphea Saunders

Government

Light For All By 2017

March 3, 2015 Webmaster

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.

JamaicaGleaner

Government

Jamaican Government Prepared to use solar energy to power houses in remote rural areas

March 3, 2015 Webmaster

“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.

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

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Electricity tribunal trashes wheeling charges

February 6, 2015 Webmaster

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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