Head of the Jamaica Public Service (JPS) Kelly Tomblin said the power company can no longer guarantee that customers will see as much as 40 per cent reduction in their electricity bills when it begins using liquefied natural gas (LNG) to operate its planned 360-megawatt power plant.
In February this year, JPS’s then Chief Financial Officer Dan Theoc had said that the company expected the country’s first 360-megawatt project to deliver savings of 30-40 per cent on electricity bills based on the plant operating on cheaper LNG while using diesel fuel as a backup.
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Kelly Tomblin, president and chief executive officer of the Jamaica Public Service Company, speaking at yesterday
Paulwell
THE EDITOR, Sir:
I wish to congratulate Claude Clarke on his recent article headlined ‘Could Paulwell’s plan light the path to recovery?’ This is the best article written to date in connection with our cost of energy problem. I doubt if electricity rates can be reduced to 15 US cents per kilowatt-hour in the near future but do know that the current design engines working on heavy fuel oil (HFO), if installed, would be 35 per cent cheaper to generate electricity than what is currently being generated at Hunts Bay or Old Harbour Bay stations. Even if LNG is not immediately available it would be a start to the reduction of rates. The modern day engines are dual fuel and can be shipped within 12 months. They can operate on HFO and be switched to LNG (without extra cost) whenever it comes. The modern dual fuel engines operating on HFO carry a heat rate of under 8,000. The JPS plants at Hunts Bay and Old Harbour Bay go as high as 12,200. If energy fuel were liberalised two years ago we would now have been able to sell it at a lower cost to the consumer. Welcome news I believe that the statement made in Parliament recently by Phillip Paulwell is welcome news for the energy sector and he should be congratulated. Now that the announcement has been made, how do we proceed? I do not believe that breaking the monopoly on transmission and distribution should be a priority but more effort should be put towards reducing the base load cost as quickly as possible. D Read more:
With competitors like Scotiabank and Victoria Mutual Building Society (VMBS), newcomer Nation Growth Microfinance Limited found a way to attract more clients to its Green Energy Loan. While its rivals offered an interest rate of over nine per cent on similar loan packages, Nation Growth’s rate is the lowest in the island at eight per cent.
“We’re not going to leave out any sector of the society,” said senior sales manager Vernon Dunkley. “In pricing our product, we assume eight per cent is the rate that the average person will find feasible.” But although eight per cent can be considered unprofitable, Dunkley said the company would not raise its rates since this will leave some potential customers behind. “We don’t think the way our competitors think,” he said at a Development Bank of Jamaica energy conference at Emancipation Park on Friday. “If we give customers an opportunity to save, then they end up with more funds to spend on other things, like one of our other products.” Building customer relationships is a crucial strategy, he said, noting that small increments of profit spread out over many clients will leave Nation Growth with a bottom line similar to other firms. Green energy loans are the latest offering by financial institutions that provide small and medium enterprises as well as residential customers the opportunity to retrofit their properties with energy conservation devices. The ongoing discussion about alternative energy sources has provided the perfect opening to introduce people to what those alternatives are, Dunkley said. All three institutions have partnered with companies providing renewable energy solutions to make it easier for customers to choose alternatives. Both Nation Growth’s and Scotiabank’s partnerships with Iree Solar and New Leaf, respectively, allow for customers to sell any excess energy they might generate to the Jamaica Public Service using the standard operating contracts provided through the Offices of Utility Regulation. VMBS’s partnership with ConserveIt provides discounts on heating systems and other energy sources, said the energy company’s chief marketer, Milton Jackson. Read more:
Science, Technology, Energy and Mining Minister Phillip Paulwell examines one of the solar panels at his home. Claude Clarke applauds the minister’s lobby for a mix of energy fuels but parts ways on the push for a break-up of JPS’s monopoly on electricity distribution.- Contributed
Claude Clarke, Contributor While I disagree with Phillip Paulwell’s assertion that the distribution of electricity should be opened up to competition, I am convinced that his newly announced policy – to open the choice of the energy sources used to produce electricity to competition – is potentially the key to bringing electricity costs to levels that would give the Jamaican economy a chance to compete and make this essential service affordable for the consumer. Present and known technology allows electric power to be most efficiently delivered through transmission lines. This type of delivery involves an extensive and expensive infrastructure, and seeking to replicate it would be highly wasteful of capital. New entrants to the business would be required to use valuable capital to construct very costly infrastructure, and Jamaicans would, ultimately, have to pick up the tab. This, combined with the fact that distribution represents no more than 20 per cent of the price of delivered electricity, supports the view that electricity distribution is a natural monopoly. Monopolies are not always bad, and in many situations they are necessary for the most efficient delivery of an economic product. However, in these circumstances, it is Government’s duty to use regulations to stand in the place of the market to ensure best prices, quality, and service. A fairly well-developed electricity distribution infrastructure already exists in Jamaica, and Government is in a position to apply the necessary regulatory and oversight authority to force the monopoly distributor to meet specific cost targets and set connectivity charges that are fair to its generation competitors. essential national objectives In contrast, electricity generation can only benefit from competition. As I said in July last year in my
SOMETHING is drastically wrong with this country. We have been informed by the best of our scientific minds that close to half of us are mentally unstable and yet we have never considered that among that 50 per cent may be politicians.
We seem to be people who mean well, but somehow don’t want to do well. In the time of the last administration, a lot of noise was made about transforming energy from expensive oil-burning to the interim stage of LNG. It wasn’t exactly earth-shattering, but it indicated that we were on the right track towards making our country more competitive in the region and giving our people a chance to make their lives more meaningful. As the talk of moving to liquid natural gas (LNG) gained momentum, so it seemed did the savvy of those who made up the last JLP administration. First, the Office of the Contractor General pushed its way to the front and the JLP Government wilted as the people rejoiced. As one listened to “the people” it must have seemed that there were many scallywags stalking the halls of JLP party central. An election was later held and the JLP was soundly rejected. Close to one year later, the only sound voice in the present PNP administration seems to be that of PNP minister, Phillip Paulwell. We have all accepted the fact that if we do not configure our energy-producing sector to move away from heavy oil-burning, we will remain in the backwoods forever. That we know. In the last JLP administration, one which made its name through making Jamaicans even more distrustful of politicians than they were before, once the matter of LNG arose, all eyes lit up! Too many people were making too much money, we thought. And even if we did have the full picture in our minds, it must have meant that we the people were being shafted. Or so we imagined. In the end, a weak JLP administration bowed to the dictates of political and public pressure and the entity that had won the concession for introducing LNG to Jamaica, Exmar, and its local connection were scuttled. The PNP rejoiced. With a PNP administration that is close to one year old and is generally suffering from “old-age” in so short a time, there have been a few areas which have attracted my attention, and it seems the attention of the general public, if word at street level still has any credence. I speak, of course, of the energy ministry. First, there have been the efforts in levelling the playing field in the mobile phone market. Somehow that seems to be on the reverse as one big telecoms player has been playing grand games with the public. Second, a convenient and totally indiscriminating public has bought the idea that that particular telecoms entity is deeply in love with them. That said, Minister Paulwell’s strident efforts to bring about a lowering of the energy bill to ALL in this country must be lauded. First, there was the thought among many that the LNG project was going to be government-driven and run by a historically proved inefficient government, especially one dominated by the PNP, an administration that has a history of being anti-business and too socialist-oriented. Second, as the world turns, and especially in Jamaica, corruption was the big bugbear. The present arrangement which takes the LNG supply project totally out of the hands of government, once it had reached the stage of deciding the directions of the energy policy of the country is, to me, the best compromise. It is not the perfect one, the one that I would have preferred – that of reverting to awarding the LNG bid to Exmar and its local partners. To me, however, Minister Paulwell has committed his ministry and government to the JPS lowering energy rates by 50 per cent by the year 2015, a time when the people of this country will still have the chance to make a decision on the direction of his government. Let us face it – there is not much that the Portia Simpson Miller administration can feed to the people as pap at this time. It won the 2011 elections on wild and reckless promises and mostly on the fact that it placed the populist PM Simpson Miller out front to play her song-and-dance routine to the people. Since the win, her song has died and her dance has failed to move us, but in the bleachers, the political watchers know that the Opposition JLP has a next-to-impossible chance of regaining all that was lost and given away by the abysmal and indecisive leadership of Bruce Golding. Seaga was dead right! The IMF analysis of economic trends for the next five to 10 years makes for bleak reading. Jamaica has lived most of its post-independence life as a mendicant nation where our prime ministers earn their kudos and clout at the polls for selling to the people their potential for borrowing the most. To a people of low-information voters and aggressive businessmen who are always seeing in such an arrangement an opportunity to make an extra buck, that simply feeds into the idea that government in this country must not be a facilitator as much as it ought to be a feeding tree. The people rely on this, especially whenever a PNP administration is in power, and big businesses know that as much as they hate to do business during a PNP administration, if they want to survive, the ball has to be kicked back and forth. Again, Seaga was right. In an administration filled with too many old socialists, Phillip Paulwell is a leading light in the effort to draw the PNP into the new 21st century. Finance Minister Peter Phillips has long shucked off his socialist leanings as the rigours of the current economic climate present themselves to him in a most unkind light. He has to face the harsh reality of an IMF programme in danger of being derailed by the historical politics of the PNP. The negotiations need the full cooperation of all inputs from the various ministries such as the energy and commerce ministries. We all know that the prime minister is out to lunch, so not much can be expected there more than a tip to the poor waitress, a hug and a kiss. Poor “she”. Keep doing your thing, Minister Paulwell. Who knows, maybe even the most inflexible leader can be brought fully into the 21st century.
SOMETHING is drastically wrong with this country. We have been informed by the best of our scientific minds that close to half of us are mentally unstable and yet we have never considered that among that 50 per cent may be politicians.
We seem to be people who mean well, but somehow don’t want to do well. In the time of the last administration, a lot of noise was made about transforming energy from expensive oil-burning to the interim stage of LNG. It wasn’t exactly earth-shattering, but it indicated that we were on the right track towards making our country more competitive in the region and giving our people a chance to make their lives more meaningful. As the talk of moving to liquid natural gas (LNG) gained momentum, so it seemed did the savvy of those who made up the last JLP administration. First, the Office of the Contractor General pushed its way to the front and the JLP Government wilted as the people rejoiced. As one listened to “the people” it must have seemed that there were many scallywags stalking the halls of JLP party central. An election was later held and the JLP was soundly rejected. Close to one year later, the only sound voice in the present PNP administration seems to be that of PNP minister, Phillip Paulwell. We have all accepted the fact that if we do not configure our energy-producing sector to move away from heavy oil-burning, we will remain in the backwoods forever. That we know. In the last JLP administration, one which made its name through making Jamaicans even more distrustful of politicians than they were before, once the matter of LNG arose, all eyes lit up! Too many people were making too much money, we thought. And even if we did have the full picture in our minds, it must have meant that we the people were being shafted. Or so we imagined. In the end, a weak JLP administration bowed to the dictates of political and public pressure and the entity that had won the concession for introducing LNG to Jamaica, Exmar, and its local connection were scuttled. The PNP rejoiced. With a PNP administration that is close to one year old and is generally suffering from “old-age” in so short a time, there have been a few areas which have attracted my attention, and it seems the attention of the general public, if word at street level still has any credence. I speak, of course, of the energy ministry. First, there have been the efforts in levelling the playing field in the mobile phone market. Somehow that seems to be on the reverse as one big telecoms player has been playing grand games with the public. Second, a convenient and totally indiscriminating public has bought the idea that that particular telecoms entity is deeply in love with them. That said, Minister Paulwell’s strident efforts to bring about a lowering of the energy bill to ALL in this country must be lauded. First, there was the thought among many that the LNG project was going to be government-driven and run by a historically proved inefficient government, especially one dominated by the PNP, an administration that has a history of being anti-business and too socialist-oriented. Second, as the world turns, and especially in Jamaica, corruption was the big bugbear. The present arrangement which takes the LNG supply project totally out of the hands of government, once it had reached the stage of deciding the directions of the energy policy of the country is, to me, the best compromise. It is not the perfect one, the one that I would have preferred – that of reverting to awarding the LNG bid to Exmar and its local partners. To me, however, Minister Paulwell has committed his ministry and government to the JPS lowering energy rates by 50 per cent by the year 2015, a time when the people of this country will still have the chance to make a decision on the direction of his government. Let us face it – there is not much that the Portia Simpson Miller administration can feed to the people as pap at this time. It won the 2011 elections on wild and reckless promises and mostly on the fact that it placed the populist PM Simpson Miller out front to play her song-and-dance routine to the people. Since the win, her song has died and her dance has failed to move us, but in the bleachers, the political watchers know that the Opposition JLP has a next-to-impossible chance of regaining all that was lost and given away by the abysmal and indecisive leadership of Bruce Golding. Seaga was dead right! The IMF analysis of economic trends for the next five to 10 years makes for bleak reading. Jamaica has lived most of its post-independence life as a mendicant nation where our prime ministers earn their kudos and clout at the polls for selling to the people their potential for borrowing the most. To a people of low-information voters and aggressive businessmen who are always seeing in such an arrangement an opportunity to make an extra buck, that simply feeds into the idea that government in this country must not be a facilitator as much as it ought to be a feeding tree. The people rely on this, especially whenever a PNP administration is in power, and big businesses know that as much as they hate to do business during a PNP administration, if they want to survive, the ball has to be kicked back and forth. Again, Seaga was right. In an administration filled with too many old socialists, Phillip Paulwell is a leading light in the effort to draw the PNP into the new 21st century. Finance Minister Peter Phillips has long shucked off his socialist leanings as the rigours of the current economic climate present themselves to him in a most unkind light. He has to face the harsh reality of an IMF programme in danger of being derailed by the historical politics of the PNP. The negotiations need the full cooperation of all inputs from the various ministries such as the energy and commerce ministries. We all know that the prime minister is out to lunch, so not much can be expected there more than a tip to the poor waitress, a hug and a kiss. Poor “she”. Keep doing your thing, Minister Paulwell. Who knows, maybe even the most inflexible leader can be brought fully into the 21st century.
Whatever else might have been the relevance of Venezuela‘s presidential election to Jamaica, the most immediate concern for Kingston was the future of the PetroCaribe energy agreement. It is little wonder, therefore, that our Government – particularly the energy minister, Mr Phillip Paulwell – has hardly masked its glee at President
THE EDITOR, Sir: I applaud the Government, any government, for having the vision to seek out new approaches and modalities in attempting to address the myriad challenges we face as a growing nation. I am, however, puzzled that it took us spending all of US$2.8 million (J$252 million at today’s rates) to learn that, according to Energy Minister Phillip Paulwell, the liquefied natural gas (LNG) project is not feasible! My problem with all this is, had these politicians been running their own businesses, would they be prepared to expend all those resources to come up with such results? I think not. Over and over we see this trend in Jamaica where one government starts a project with significant outlay of public funds (usually borrowed money), only to see a succeeding administration shelve or abandon it, with little regard for the expenditures already incurred. And we wonder why we are carrying such a burdensome debt load with little to show for it? We must demand an immediate accounting and disclosure to the nation of the J$252-million expenditure on this LNG project. Nothing less will suffice. When I think of the number of rural roads that could be fixed, toilets that could be placed in rural schools to expose children to 20th-century sanitary conveniences, or school furniture that could be repaired in order to provide basic comfort to our children in the learning environment, it pains my heart deeply. But what hurts even more is that these same children will be forced to help repay this borrowed money later, despite not enjoying any benefit from its expenditure. CARL BLISS cabliss@flowja.com Read more : Key players in the private sector have signalled that they want to be given a role in the new arrangement for the establishment of |