WASHINGTON (CMC)
CHIEF Executive Officer (CEO) of Jamaica’s PetroCaribe Development Fund (PDF) Dr Wesley Hughes has said that even a facile victory by
THE EDITOR, Sir: I must thank Winsome Callum of the Jamaica Public Service Company (JPS) for her response (‘Don’t mislead the public, Mr Montague’,Gleaner, April 9, 2013) to my calls for her company to share in the sacrifices the whole nation is being called to undertake. The call was made on March 6, 2013 for her company to reduce electricity rates by 10-12 percentage points. Two recommendations were then made. 1) For JPS to use the recommended Office of Utilities Regulation rates, as contained in the current request for proposal (RFP), for alternative energy solutions. JPS is suggesting a rate of US$0.2672 per kilowatt-hour. If you add the US$0.11 per kilowatt-hour, for transmission and distribution, you would get US$0.3772 per kilowatt-hour. JPS charges approximately, US$0.40 per kilowatt-hour. A decrease in its rates to match the OUR rates would be welcomed by all JPS customers. 2) The Government was also asked to reduce the so-called guaranteed 17.5 per cent profits. The writer claims there are no such guaranteed profits. Therefore, could JPS consider publishing the terms and conditions of the licence? Would the JPS also consider engaging the OUR and see how best it could bring the rates in harmony? Noting that alternative energy solutions are more expensive? I am well aware that JPS is one of our best corporate and compassionate citizens and will take into account the feeling of merciless exploitation, that many of its customers feel when we get our monthly bills. I am also heartened by the openness of the company for dialogue and anxiously await an invitation so to do. In the meantime, all of Jamaica would be so happy if the JPS announce a cut in its rates. JPS, we are depending on you to help in whatever way you can to advance Jamaica. Chairman, JLP Read more: THE EDITOR, Sir: I must thank Winsome Callum of the Jamaica Public Service Company (JPS) for her response (‘Don’t mislead the public, Mr Montague’,Gleaner, April 9, 2013) to my calls for her company to share in the sacrifices the whole nation is being called to undertake. The call was made on March 6, 2013 for her company to reduce electricity rates by 10-12 percentage points. Two recommendations were then made. 1) For JPS to use the recommended Office of Utilities Regulation rates, as contained in the current request for proposal (RFP), for alternative energy solutions. JPS is suggesting a rate of US$0.2672 per kilowatt-hour. If you add the US$0.11 per kilowatt-hour, for transmission and distribution, you would get US$0.3772 per kilowatt-hour. JPS charges approximately, US$0.40 per kilowatt-hour. A decrease in its rates to match the OUR rates would be welcomed by all JPS customers. 2) The Government was also asked to reduce the so-called guaranteed 17.5 per cent profits. The writer claims there are no such guaranteed profits. Therefore, could JPS consider publishing the terms and conditions of the licence? Would the JPS also consider engaging the OUR and see how best it could bring the rates in harmony? Noting that alternative energy solutions are more expensive? I am well aware that JPS is one of our best corporate and compassionate citizens and will take into account the feeling of merciless exploitation, that many of its customers feel when we get our monthly bills. I am also heartened by the openness of the company for dialogue and anxiously await an invitation so to do. In the meantime, all of Jamaica would be so happy if the JPS announce a cut in its rates. JPS, we are depending on you to help in whatever way you can to advance Jamaica. Chairman, JLP Read more: AZUREST Partners and Cambridge Project Development are saying that natural gas electricity generation can happen in Jamaica in little over a year. The two firms’ joint submission to the Office of Utilities Regulations (OUR) proposes to use natural gas-fired power barges, which can be built within 12 to 15 months after getting the go-ahead from the Government.
What’s more, they believe that they can access liquefied natural gas (LNG) economically, “because we will have our own LNG source in the US Gulf Coast, the cheapest gas source in the world”. The idea is to directly feed the power barges located in Jamaica from its fleet of smaller LNG supply vessels. “Our smaller ships, of a scale appropriate to Jamaica, make our LNG transport process economical,” said Kenneth Allen, managing director of Azurest. Allen said that his proposal allows for a modular approach to building out the generating capacity — each barge can provide 100 megawatts (MW) of capacity — but if allowed to build all of the 400 MW, its LNG-fired plants could save the country US$415 million annually. “If we are allowed to put in all of our 400 MW of clean LNG high-efficiency generation capacity, then we should be able to reduce the price paid by the Jamaican public by at least 10 US cents (from 40 US cents to about 28 US cents), or about 25 per cent across the whole country,” he said. Five entities have presented proposals to the OUR in response to its announcement in February that it would review proposals to supply generation capacity. The OUR aims to advise the Government of the final results of its analysis on Monday. Jamaica Public Service Company (JPS) also submitted three proposals for consideration by the OUR, according to the power company’s CEO, Kelly Tomblin. The proposals are for the construction of 360 MW of new generation capacity, using combined cycle technology and a combination of fuel sources: natural gas as primary fuel, with Automotive Diesel Oil (ADO) as backup fuel; natural gas as primary fuel with inlet air cooling power enhancement, and ADO as backup fuel; and Liquefied Petroleum Gas (LPG) as the primary fuel. However, Wartsila Caribbean, which is the proposed technology provider for three of the bids, including the Cambridge/Azurest joint venture, has said that its reciprocating engines are a good deal more efficient than the combined cycle gas turbines (CCGT) being proposed for use by JPS. The reciprocating engines could save over US$100 million a year more than the proposed CCGT, according to Wartsila Caribbean Vice-president Rodney George — and that’s even without LNG. “Bogue is a living example where the CCGT plant has a combined cycle efficiency of only 40 per cent,” said George. “In comparison, the JEP (Jamaica Energy Partners) West Kingston plant with Wartsila reciprocating engines, have a simple cycle efficiency of close to 45 per cent… regardless of what fuel is utilised, be it LNG, LPG, or ADO, the efficiency quotient remains the same.” Despite suggestions to the contrary, JPS is confident that combined cycle technology is of far greater benefit to the country than other options being considered, such as diesel engine technology, according to the JPS boss. “While we haven’t seen the other proposals, our information shows that CCGT not only offers lower overall costs through greater efficiency and lower operating and maintenance costs. It is also more environmentally friendly,” Tomblin said. “Although JPS and the GOJ continue to evaluate all potential gas supply options, if the immediate supply options for LNG do not result in the desired reduction in electricity charges, LPG (Liquefied Petroleum Gas) is a great option. “LPG is more accessible right now and can be easily incorporated in our long-term plans for fuel diversification and price reduction,” she added. “The current prices show LPG providing attractive cost reductions for our customers.” In the meantime, George proposes that the use of backup liquid fuel such as heavy fuel oil (HFO) is “not far-fetched given the uncertainty of securing LNG or LPG supplies”. Allen said that if the other bidders aren’t using LNG, “they are probably not the lowest cost solution for the Jamaican electricity consumer”. Cambridge is a developer of energy and environmental infrastructure projects focused on the Caribbean and has in-house experience successfully developing over US$2 billion in projects in the Caribbean Basin, as well as the long-term management of over 12 independent power plants. Azurest Partners is a financial advisory and capital-raising firm, where team members have collectively raised over US$900 million in equity and US$2 billion in debt financing for clients in the US, UK and Africa. Read more: Governor General, His Excellency the Most Hon. Sir Patrick Allen, says the much anticipated construction of a 360-megawatt electricity capacity plant will commence this calendar year. The Governor General, who was delivering the Throne Speech to mark the opening of the 2013/14 Parliamentary Year at Gordon House on Thursday morning, April 4, said the new facility will replace PROFESSOR Rosalea Hamilton, head of the MSME (micro, small and medium-sized enterprises) Alliance, is calling for clarity on Wednesday’s implementation of an increase in gas tax. “The ripple effect of this tax is devastating, as it affects all sectors. Therefore, more clarity and transparency are required on how it is being applied,” Hamilton told Auto. Hamilton said with this week’s increase in fuel prices, a representative of the state-run refinery Petrojam should explain how the new tax is applied. “It’s the responsibility of the people who have the authority to make these decisions to properly inform the public. They are to say, very clearly, that in addition to the US Gulf reference price and movement of the American dollar, we now have a tax of whatever the figure is so that we’re all clear,” she said. According to Petrojam’s weekly billing prices, the price of gasolene went up on Wednesday by $2.31 per litre, while the price of diesel rose by $2.50 per litre. The professor said this situation compounds an existing problem of Petrojam’s pricing formula “which is not transparent”. However, in confirming the application of the new tax on fuel prices on Wednesday, Winston Watson, managing director of Petrojam, said: “The tax was applied and the effect was minimal. The tax is a like-for-like replacement.” Watson explained that the Government had replaced the Custom User Fee (CUF)
Governor General, His Excellency the Most Hon. Sir Patrick Allen inspects the guard of honour before delivering the 2013/14 Throne Speech during the State Opening of Parliament held on Thursday, April 4, at Gordon House.