Category: JPS

There is never uncertainty when Shelly-Ann Fraser-Pryce rockets from the blocks in a 100-metre dash. Usain Bolt and Yohan Blake may get off a bit behind the competition, but they accelerate with such command that the prize is usually theirs.

The same, unfortunately, cannot be said for how the Jamaican Government manages the country’s affairs, exemplified this week by the confusion over energy policy.

Energy Minister Phillip Paulwell had long since declared his Government’s intention to break the monopoly in transmission and distribution (T&D) of electricity. That seemed to be settled policy. On Tuesday, Mr Paulwell was contradicted by Dr Carlton Davis, a senior adviser to Prime Minister Portia Simpson Miller. He favours a “regulated monopoly” and suggests that Mr Paulwell’s pronouncements were, for the Government, not conclusive.

Then, Prime Minister Portia Simpson Miller tiptoed between the raindrops. The upshot continued, if not deepened, uncertainty.

PROHIBITIVE COST

The policy tug of war might have been considered just another bit of Jamaican political theatre, but the fact is that the issue at hand is of great importance and urgency. There is clear consensus that, bad economic management apart, the high cost of electricity is the greatest constraint to the competitiveness of Jamaican firms and to growth in output.

Jamaicans pay upwards of US$0.40 per kilowatt-hour (kWh) of electricity, higher than the rate in most of its regional economic competitors. Policymakers have talked much, over many years, about strategies to reduce the cost of energy. They have achieved little.

Recently, though, we appeared to have been getting somewhere, with a plan to shift from expensive oil to cheaper fuels to generate power. The idea is to start with natural gas, although coal remains in the mix.

Several months ago, the Jamaica Public Service Company (JPS), the light and power provider, and its owners won a bid to establish a 360-megawatt power plant that is to be fired by natural gas. The Government is also about to rule on bids for a liquefied natural gas storage and regasification facility.

The projection is that using cheaper natural gas to fire this power plant, combined with its greater efficiency, will lead to a reduction in the cost of electricity of between 30 per cent and 40 per cent.

Paulwell’S AMBITIOuS TARGETS

At the same time, Mr Paulwell has been loudly promoting the break-up of the JPS’s monopoly on the grid, arguing that this could deliver the 60 per cent drop in the price of power that he has set as his benchmark.

The minister’s critics, however, argue that the energy minister’s focus on the power company’s T&D monopoly has introduced uncertainty into its operations – exacerbated by a recent court ruling against the exclusivity of the JPS’s operating licence – especially with the company being in the market for capital to finance the gas-fired plant.

The attention, critics feel, should be on fuel choice. Dr Davis agrees. He believes that Jamaica’s electricity market, with peak demand for under 700 megawatts, is too small for a competitive free-for-all.

The statement from the prime minister’s office acknowledges the market uncertainty engendered by the liberalisation debate and the need for continuity “in the short run”. But it makes no policy commitment.

We wonder what would have been the result of Jamaica’s record run in the men’s 4x100m relay at the Olympics if there was such uncertainty in the team.

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