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Category: Government

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Government JPS News

JPS Still Creating Value For Korean Investor

June 17, 2013

Korea Electric Power Corporation (Kepco), which holds 40 per cent interest in the Jamaica Public Service Company (JPS) reported a 3.4 per cent increase in the book value of its investment in the utility to 303 billion won (US$267 million) in its March 2013 financials.

It indicates that JPS continues to provide value for its shareholders despite its March 2013 quarterly loss totalling some US$789,000, of which 40 per cent represented Kepco’s share of the loss.

Kepco is a subsidiary of Korea East-West Power.

The rise in the book value was caused by a 17-billion won (US$15-million) increase in ‘other comprehensive income‘ which represents certain gains not reflected in the profit and loss account. The financials posted to the US Securities and Exchange did not disclose the nature of the gains.

Kepco acquired JPS shares in 2011 for 301.9 billion won. Last financial year, the Korean company earned US$2 million in dividends from its JPS investment. The utility paid out a total of US$5 million in dividends last year.

For the three months ending March 2013, the company took no dividends, according to the financials.

The profitability of JPS, one of the largest companies in Jamaica, was affected by higher-than-usual finance costs at US$17 million for the quarter (US$11 million a year earlier) which nearly ate through the US$18 million of gross profit.

JPS’s other top owners are Japan’s Marubeni Corporation, at 40 per cent, and the Government of Jamaica, which holds 19.9 per cent.

The power utility currently earns US$1.14 billion (J$112b) of revenue annually as the monopoly distributor of electricity. It is capitalised at US$378.77 million (J$37.5b) while its net assets amount to US$838.46 million (J$83b).

business@gleanerjm.com

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Alternative Energy Government News

Paulwell Meets Energy Stakeholders Today

June 6, 2013

Phillip Paulwell - File
Phillip Paulwell – File

Damion Mitchell, Editor – Radio & Online

The Science, Technology, Energy & Mining Minister, Phillip Paulwell, is to meet with private sector stakeholders in Montego Bay this afternoon.

They are to explore investments opportunities within the industry.

There have been increasing calls for Jamaica to shift its reliance on oil to produce energy and instead pursue other sources like wind and solar.

Paulwell says he wants to facilitate the interest of potential investors in the energy sector.

The forum is scheduled to be held at the Montego Bay Convention Centre.

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Alternative Energy Electricity Government News Solar Energy

Get Green! – Opposition Spokesman Mair Proposes All Gov’t Buildings Be Solar Powered

June 3, 2013

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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Alternative Energy Electricity Government News Solar Energy

Get Green! – Opposition Spokesman Mair Proposes All Gov’t Buildings Be Solar Powered

June 3, 2013

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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Electricity Government News

Sterling To Arrange Local Financing For LNG Bidder – OUR Sets New Project Deadlines

May 31, 2013

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

Electricity Government JPS News

Reducefuel Prices For AllJamaicans – Mair

May 30, 2013

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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