Barbara Gayle,
THE EDITOR, Sir:
Hardly a day goes by without me hearing of electricity theft from Jamaica Public Service Company (JPS) supply lines. What about armoured cable? Has JPS tried this?
Twin armoured cables are made up of a minimum of five layers of insulation, the individual insulation of the two conductors, an overall insulation of these two, then comes the armour rap which in the low cost cables is normally made from aluminium and finally the outer insulation.
Steel armoured cables are considered the best. The 16mm steel armoured cables come in at about US$600 per 100 metres.
I know that there are many Jamaicans who are very ingenious at theft – and not much else – but unless one calls the Grim Reaper and asks him to stay away, it would be a very brave person, or possibly a fool, who tries to make a connection to an armoured cable without first switching the power off and using the correct tools.
You can’t connect to an armoured cable by throwing up a hook! Yes, I know that future legal connections to such a line will take longer and cost more, but it is a one-off payment. This will, in the end, cost less than going to and fro to remove illegal connections or throwing up hands and saying, “We don’t know what else to do.” We can’t go on like this!
JPS does not (I stand corrected) have any means of determining the difference between line loss which varies and theft, but as it is allowed to charge you and me for that which is guessed theft, why bother to go to the expense of putting up armoured cables in predominantly theft areas.
PHIL FOSTER
croc@cwjamaica.com
St Elizabeth
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THE Office of Utilities Regulations (OUR) is to partner with the National Contracts Commission to negotiate actively with four interested bidders for the building of a new power plant and present a recommendation to the Government in 30 days.
Minister of Science, Technology, Energy and Mining Phillip Paulwell, who made the announcement during his contribution to the 2013/14 Budget Debate at Gordon House in Kingston yesterday, said the OUR is to get additional powers of monitoring, evaluation and enforcement, similar to those it has over the telecommunications sector. “Legislation will be brought to Parliament during this year to amend the current Act,” he said.
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Minister of Science, Technology, Energy, and Mining Phillip Paulwell makes his contribution to the 2013/14 Budget Debate at Gordon House in Kingston, Turn to POWER on Page 4 yesterday. (PHOTO: LIONEL ROOKWOOD)
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In 2010, the OUR went to tender for 480 megawatts (MW) of generating capacity, and the Jamaica Public Service (JPS) was the sole bidder at the time and was awarded the right to construct a 360 MW combined cycle plant. It was contemplated that the Government
would be responsible for securing the supply LNG of fuel for the new plant, through the Liquefied Natural Gas project.
However, the OUR, on February 1 this year, informed the JPS and its shareholders that it had terminated the request for proposal (RFP) process in relation to the 360-MW project. The OUR said it ended the process after JPS missed a third deadline on January 30 to complete the requirements under the RFP for the 360-MW project and had requested a 30-day extension.
The JPS said the project scope changed significantly since 2011, when it was granted approval to proceed with construction of the plant saying its role initially was simply to construct the plant, but late last year the company was asked to take on the additional responsibility of identifying a supplier and managing the process of procuring the LNG.
A subsequent decision by the OUR to accept unsolicited proposals from the JPS and other companies, this year,
saw five entities presenting unsolicited proposals for 14 discrete projects.
Yesterday, Paulwell said this development was “a big turnaround from 2010, when there was a sole bidder, signifying confidence in this administration, its policies and regulatory framework”.
He said that following evaluations by international consultants Mott McDonald, which contemplated among other factors the firmness of the proposal, the overall price and expected impact on retail electricity rates of the 14 projects submitted, four were rejected because the information was incomplete.
The energy minister said, although 10 were screened for detailed technical and comparative economic analysis, of the 10, the OUR determined that three entities made the pitch. Those include Amorview/Tankweld, which presented a
232-MW project proposed for Old Harbour and a 122.4-MW project proposed for Caymanas; JPS, which presented proposals for a 323-MW and a 350-MW combined cycle plant, both proposed for Old Harbour; and Azurest/ Cambridge, which presented a proposal for a 388-MW plant mounted on a barge.
Paulwell said all three proposed the use of natural gas.
In the meantime, he said subsequent to the OUR receiving and assessing those proposals, the Government has since received another unsolicited proposal from a Hong Kong company, proposing to build an LNG receiving terminal and power plant and to supply LNG from its own gas fields. That company has proposed a combined cycle gas-fired 360-MW power plant adjacent to the LNG hub terminal.
“After several stops and starts, today I can speak with certainty that a positive change is about to come to the supply of electricity in Jamaica. It is essential that we begin construction of new generating capacity this year; there have been too many delays, and we can no longer live with these high electricity prices,” Paulwell told the House.
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Minister of Science, Technology Energy and Minining, the Hon. Phillip Paulwell.
Mr. Speaker, I rise in support of the motion in this 2013/2014 Budget Debate, truly a critical point for our country, our economy and the well being of our people.
Over the past 15 months, as we negotiated this new crucial IMF Extended Fund Agreement from the ru
Debbie-Ann Wright, News Editor – Radio
The National Water Commission (NWC) is advising that frequent fluctuations in the power supply to the Tulloch Springs/Rio Cobre Water Supply System is affecting service to customers in Kingston, St Andrew and St Catherine.
The company says the power supply interruptions have worsened the impact of the prolonged drought.
It says the mechanical failure at one of the sources has resulted in a shortfall of more than 3 million gallons of water each day on the Tulloch Springs/Rio Cobre Water Supply System.
It says some customers in Kingston, St Andrew and St Catherine either have no water, intermittent supply or are experiencing low water pressure.
The areas affected include sections of Portmore, downtown Kingston, communities off Washington Boulevard, Molynes Road, and Spanish Town Road.
The NWC says the problem has been reported to the Jamaica Public Service and work is being done to return to normal operation in the shortest possible time.
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Debbie-Ann Wright, News Editor – Radio
The National Water Commission (NWC) is advising that frequent fluctuations in the power supply to the Tulloch Springs/Rio Cobre Water Supply System is affecting service to customers in Kingston, St Andrew and St Catherine.
The company says the power supply interruptions have worsened the impact of the prolonged drought.
It says the mechanical failure at one of the sources has resulted in a shortfall of more than 3 million gallons of water each day on the Tulloch Springs/Rio Cobre Water Supply System.
It says some customers in Kingston, St Andrew and St Catherine either have no water, intermittent supply or are experiencing low water pressure.
The areas affected include sections of Portmore, downtown Kingston, communities off Washington Boulevard, Molynes Road, and Spanish Town Road.
The NWC says the problem has been reported to the Jamaica Public Service and work is being done to return to normal operation in the shortest possible time.
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This article has been submitted by the JPS.
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As the Office of Utilities Regulation (OUR) evaluates proposals for the construction of the next generation of generating plants, the question of what is the best technology to deploy has ignited a public debate, as we saw with the recent article published in the Business Observer (Wednesday, April 3).
The two leading technologies that have emerged are the medium-speed reciprocating engines (diesel) (MSD) and the combined cycle gas turbines (CCGT). Both technologies are currently in operation in Jamaica and have some inherent advantages and disadvantages.
Total generation cost, flexibility of fuel options, ease and frequency of maintenance and environmental issues are all important considerations that will factor into the decision by the OUR in the technology choice. The analysis by JPS has concluded that the CCGT is the right generation solution for Jamaica at this time.
Policy & regulatory framework
The decision on the most appropriate technology for electricity generation is first framed by the policy objectives of both the Government and the OUR. The two most important objectives of the National Energy Policy and the regulator are:
1. A significant reduction in electricity prices; and
2. Fuel diversification.
The Government and the OUR have agreed that a policy of diversifying the mix of fuel used for electricity generation away from oil is the most effective in lowering electricity cost. JPS agrees with this policy approach and it is within that context it has conducted an evaluation of the available technologies to replace its existing capacity and prepare for sustainability and future growth in electricity demand.
Sector experience
JPS has been Jamaica’s electricity provider for 90 years and owns the largest block of power plants on the island. Its majority shareholders, Marubeni Corporation of Japan and Korea East-West Power Company together own and operate power plants (including diesels and combined cycle units) with an installed capacity of over 9,000 MW globally and using a full range of fuels: coal, gas, oil, hydro, wind, solar. No other entity in Jamaica and few others across the world can similarly claim this level of operational familiarity and experience with such a range of plants and fuel.
JPS drew on this knowledge, experience and policy objectives in preparing its proposal to the OUR and after careful analysis has concluded that the CCGT technology offers the best efficiency and flexibility option for generation expansion in Jamaica at this time.
Here’s why.
Cost of Energy
JPS ripping us off again?
April 17, 2013
Roger Chang
In the recent JPS Annual Tariff Adjustment Page 19 Technical Losses states:
“The T&D system configuration and voltage levels are critical to determining the actual
level of technical losses. Further reduction in technical losses will typically be as a
result of capital intensive programmes such as building more sub-stations or
“”increasing”” the voltage level at which we transmit and distribute electricity.”
Increasing the voltage WILL increase your electricity consumption and in effect your JPS
bill!
Most other countries practice something called “Conservation Voltage Reduction (CVR)” in
an attempt to save energy…. decrease voltage. (thanks Stanley)
The JPS nominal voltage should be 110vac or 220vac for rate 10 customers (residential)
I typically measure between 115vac to 125vac and many days close to 128vac, or 4.5% to
16.3% over nominal voltage.
Ever wonder why your motors and electrical equipment run hotter or burn up quicker?
Overvoltage?
Studies have shown 1% voltage change can yield a 0.6% change in consumption, or 2.7% to
9.8% increase in your JPS bill!
Is this there the 10% technical loss reduction will come from?
Technical losses is said to be about $1,500 million annually
Building a sub-station will cost money.
There is no cost to increase the voltage, but is an easy “hidden” way to extract more
money from every customer.
Where is the OUR?
Why is the OUR not regulating this?
Minister Paulwell?
more to come…
THE JAMAICA PUBLIC SERVICE CO. LTD. ANNUAL TARIFF ADJUSTMENT SUBMISSION FOR 2013
http://www.our.org.jm/images/
20Tariff%20Submission.pdf
http://www.myjpsco.com/_pdfs/
http://www.jsea.org.jm/docs/
20Co_July09_Draft%20v3.0_
As customers contend with the increasing cost of energy bill, they may often ask what their alternatives are.
But before you even consider costly renewable energy systems, you should first adopt a conservation approach.
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The average Jamaican household (that spends on average $12,000 per month on electricity bill) can spend $2 million on alternative energy.
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Coming off the grid isn’t merely about divorcing the company that supplies your power and charges you on a monthly basis. It’s more than that; it’s about cheaper means of supplying and using power.
“If you are not one to maximise the energy saving opportunities, producing power on your own, and getting off the Jamaica Public Service (JPS) grid won’t save you money,” said Nathan Parkins, design technician at Alternative Power Sources.
Renewable energy systems are designed to match your current consumption, that is the more you consume, the bigger and more costly your system will have to be.
“If you don’t conserve, you could very well end up spending $5 million on a system when you could have had one for $3 million,” he said.
Some energy savings opportunities are free.
Turning off lights that aren’t in use may sound like the usual energy savings lecture, but if you aren’t flicking the switch, you are increasing wastage.
Lights on during the daylight hours, are obviously wasteful.
Then there are some suggestions that would require you to spend a little extra cash.
Equipment that trap heat and in turn pass it on to you, without electricity, are an option.
Opt for solar water heater over electric water heater, Parkins advised.
“We pay so much to use the electricity to get hot water, yet we have the sun,” he said. “I can safely say solar water heater can shave 15 per cent off your light bill.”
Checks by the Sunday Finance found that the National Housing Trust (NHT) offers loans to for solar water heaters to existing mortgagers with a maximum funding of $250,000.
But, if you have already got a loan from the NHT, you would have to wait 10 years before you can access the maximum $1.5 million funding for solar panels.
Nonetheless, there are some less pricey options, which are common to most households.
People with up-to-date energy style appliances will use less power than those without.
So, if you are not too sentimental, you could think about doing away with your 30 year old refrigerator and cash in on a newer model.
Gas stoves get the energy savings nod of approval rather than an electric stove.
Overtime, old appliances lose efficiency and consume more power.
You could even place a timer on your refrigerator that shuts it off after a number of hours.
The average fridge runs 11 hours per day.
In addition, you should repair loose magnetic rubbers of the refrigerator door, it allows the cool air to leave, using up more power.
Don’t keep your fridge too close to the wall, the heat coil at the back needs enough room for sufficient circulation.
As for lighting, there’s LED. Though this is more expensive to buy than fluorescent bulbs, switching could reduce your power usage by 50 per cent.
But, Parkins said this is most necessary for businesses that need the use of light for longer periods.
Do you think the time has come to getting power on your own? Well, Parkins crunched the numbers for the Sunday Finance.
According to him, a household user who spends on average of $4,500 per month wouldn’t spend roughly half a million dollars on alternative energy.
As for the average Jamaican household that he said spends on average $12,000 per month, they can get an alternative system for $2 million.
What’s more, you don’t have to completely abandon the JPS, you could opt to make a particular room solar.
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THE viability of the Jamaica Public Service Company (JPS) has been questioned, with the light and power company in breach of loan covenants that could see creditors demanding immediate repayment of up to US$430 million ($42.4 billion).
It’s a financial situation that has led to JPS Chief Executive Kelly Tomlin volunteering to a 10 per cent pay cut, as the company works with lenders and shareholders on a short-term solution, and talks with the Office of Utilities Regulation (OUR) about new tariff guidelines.
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TOMLIN… our goal is to electrify 100 per cent of Jamaica.
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“Given the macroeconomics that we are facing and given the regulatory environment, our lenders are now saying that they don’t believe they can give us any further waivers,” Tomlin told the Jamaica Observer yesterday.
Auditors noted in JPS’s annual financial statements that the company has, since March 2012 — a month before Tomlin’s appointment — not been compliant with a condition included in long-term loan agreements with international development financial institutions, requiring the firm to maintain a 3:1 Debt to Earnings before Interest Tax Depreciation and Amortisation (EBITDA) ratio.
The violation provides the lenders with the option of issuing notices of default and declaring all principal and interest amounting to US$430 million, as at December 31, 2012, as immediately payable, stated the auditor’s notesaccompanying the power company’s 2012 financial results.
Should the respective lenders exercise their right to demand the repayment of this amount, it would cast significant doubt about the company’s ability to continue as a going concern, without the support of the shareholders or other third parties, the statement said.
Tomlin said yesterday that the company is in talks with creditors for an extension of the waivers while it works with the OUR and shareholders.
JPS in its annual tariff submission to the OUR blamed the breach on “significant under-recovery of fuel costs” experienced in 2011 and 2012, including more than US$30 million last year alone. Against this background, the firm said its “continued viability… will be dependent on a change to the regulatory approach in relation to the recovery of fuel costs.”
A quarter of the electricity that JPS transmits is lost to heat and theft, with the majority due to the latter. JPS contends that the challenge of substantially reducing leakages is socio-economic and largely outside of its control. In its submission to the OUR, JPS urged “regulatory acceptance of that fact” and called for a more holistic approach to combat electricity theft, including social intervention projects.
JPS is asking the OUR to allow the full pass-through of fuel costs on light bills as of the effective billing date of the Annual Adjustment Determination — July 1, 2013. The company said it is essential to ensuring the viability of the utility, given the context that in a typical year, its return on profit “is not likely to be more than two to three per cent of the total cost of electricity, against the background of what it deems as unfair penalties as they relate to the recovery of fuel costs.
The company noted that the losses penalty increases as sales shrink, given that the losses are calculated as a percentage of sales, and increases as the price of oil goes up. JPS reported a 63 per cent decline in annual net profit to US$12.9 million on flat sales last year.
The fuel penalty actually represented four per cent of the cost of fuel, thereby virtually eliminating all of the operating profit of the utility in 2012, the company said in its submission.
According to the light and power company, if approved, this measure would result in “a marginal increase in the average residential customer’s bill of less than 0.5 per cent or $16 per month”.
JPS suggests that customers stand to benefit substantially over the medium term, through a vibrant and viable JPS that can support generation expansion to significantly lower cost and invest in the network to improve service and reliability.
The successful implementation of a sustainable loss reduction programme, aimed at regularising 10,000 – 15,000 households per annum, will ultimately also result in a substantial reduction in the cost of electricity for all, said the company in its submission.
“The problem is everybody is willing to help if they see light at the end of the tunnel, but with this particular regulatory framework, there can be no light at the end of the tunnel because we seriously do not know how to stop crime, and that’s what we are being asked to do,” Tomlin said yesterday.
“We are giving power to everybody; that’s our goal, to electrify 100 per cent of Jamaica, but we all know 100 per cent of Jamaica cannot afford electricity,” she argued.
Meanwhile, Tomlin said that the company has independently executed a number of cost-cutting measures in the face of severe budget constraints.
“Customers don’t want us to reduce our capital budgets, or else you will experience more and more outages. But we have had redundancies and we are doing what we can,” Tomlin said, revealing that, in addition to her 10 per cent pay cut, other executives have volunteered to give up their vacation.
“We are asking everybody to give,” she said. “Unfortunately, our charitable contributions have also been severely slashed.”
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