electricity Archives - Page 7 of 18

Amendments to OUR Act will facilitate investment in electricity sector

October 27, 2015 Webmaster

KINGSTON, Jamaica — The amendments to the Office of Utilities Regulation (OUR) Act will facilitate increased investment in the country’s electricity sector and make the entity’s governance structure more transparent and accountable.

This was the word from minister of justice, Senator Mark Golding, in his contribution to the debate on the Bill in the Senate on Friday, which was passed.

He noted that the mechanism used by the OUR to set tariffs has discouraged the levels of investment needed to develop Jamaica’s baseload capacity, which is crucial for the country’s economic development.

“Jamaica needs to attract substantial private sector investment capital, much of it from international investors, to the electricity sector, in order to achieve urgent national priorities on which the competitiveness and growth of the economy depends,” he said.

Describing the OUR governance structure as “outdated,” and “problematic,” Golding said the entity is affected by very limited governance arrangements in “which excessive power is concentrated within an internal bureaucratic structure, which lacks robust checks and balances, and has ineffective accountability.”

He told the Upper House that the issues will be addressed by requiring the OUR to be guided by the amended Act, the All-Island Electric Licence of 2011, and certain specified principles, when setting tariffs for the electricity sector.

“This more transparent decision-making system is being supported by an expanded governance framework being built into the OUR’s structure as well as by this legislation,” he said.

The new provisions will require that the regulator, when setting rates, to take into account: the cost, safety and quality of the service being provided, as well as Jamaica’s economic development; special rates for consumers, who might not be able to pay the full cost of electricity, as well as those involved in economic development activities; and tariffs for special economic zones.

It will also facilitate the inclusion of non-executive members to the OUR, to provide oversight support.

The House of Representatives passed the amended Act on October 13.

Peferred Bidders Identified For 190-Megawatt Power Plant

October 26, 2015 Webmaster

IT APPEARS that the Electricity Sector Enterprise Team (ESET) has identified a preferred bidder for the supply of gas to a 190-megawatt plant, which the Jamaica Public Service Company (JPS) is to build by the fourth quarter of 2017.

A member of the Portia Simpson Miller-chaired Cabinet said on Friday that the amendments being made to the Office of Utilities Regulations (OUR) Act was part of a move to ensure Jamaica is able to attract significant investment capital.

“Jamaica has found it difficult to attract investment in the baseload capacity over many years,” Mark Golding said in the Senate.

He noted that with Jamaica becoming the first non-North American Free Trade Agreement (NAFTA) country to benefit from the grant of a licence for the export of liquefied natural gas (LNG) from the United States, consideration is now being given to establish a gas hub in the country.

“It has given us a strategic advantage in establishing this regional hub, and we have gone through a process of seeking investor interest. We have had significant investor interest for the establishment of the gas terminal to supply gas to the new 190-megawatt plant that JPS will be building and also to possibly provide gas from that terminal to other users in the country and, indeed, in the region. I believe a preferred bidder has been identified,” Golding said.

He lamented the fact that despite many attempts to get LNG to Jamaica, the country has been unable to do so mainly because of uncertainty about regulation of the electricity sector.

Yesterday, Phillip Paulwell, the country’s energy minister, said an announcement is to be made shortly by ESET about the selection of two bidders – one to construct the new generation plant and the other to build the infrastructure and deliver LNG to the facility.

“It is fundamentally part of the diversification that is taking place. The price of electricity has gone down by 30 per cent already, but what we want to achieve is diversification, and we would never get back to the state where when the price of crude oil goes up, we are affected by severely high prices,” Paulwell said.

Meanwhile, Golding said in the Senate that the amended OUR Act will lead to improved investor interest. He argued that it would benefit Jamaica “by ensuring that our baseload capacity can be transformed and that we can get the investments needed”.

According to the Cabinet minister, investment in providing baseload energy requires significant spending, and investors are “not prepared to invest in this market where their pricing is set in a totally arbitrary manner by persons who are not accountable to anyone”.

Undermining Regulator’s Independence

Among the amendments set out in the new OUR bill, which has now been passed by both Houses of Parliament, are for the OUR to use certain factors in determining the rates to be paid to a utility company for the generation, transmission and distribution of electricity. Those factors include observing policy directions of the Cabinet and examining the licence of the utility provider, specifically as it relates to determining the appropriate rate of return for investment.

But opposition senators opposed the amendment, saying it was guaranteeing profit to investors and that it would undermine the independence of the regulator.

“The OUR will no longer be able to call itself independent,” Kamina Johnson Smith said, as she raised concerns about a possible overreach of the executive.

“We will no longer be able to truthfully state, as a fact, that we can boast of having an independent regulator,” she added.

“It is anti-transparency, anti-investor and anti-people of Jamaica,” Johnson Smith charged.

But Golding said she has misunderstood the intent of the bill and said further that getting cheaper energy for Jamaica hinges, in part, on the provisions in the bill. He argued also that Cabinet has a most important role in the process and thus it “cannot totally drop its hands in the face of a dysfunctional regulatory system that is denying the country effective” solutions to lower energy prices.

“We cannot divest, in the name of independence, to unaccountable bureaucrats, the ability to stymie investment through either their own incompetence or whatever may be the problem. We have suffered under that system,” Golding added.

The Gleaner

Electricity JPS News

Monymusk, Frome Ready To Provide Electricity But…

October 8, 2015 Webmaster

While the Pan Caribbean Sugar Company (PCSC)-owned Monymusk and Frome sugar factories are now ready to supply electricity to the national power grid, their delivery of the service is being held back by procedural matters, including the need for an operational licence.

“We have made some progress, but we still have some way to go in our discussions with the Office of Utilities Regulation (OUR) and the Jamaica Public Service (JPS) regarding a licence and a power-purchase agreement,” Delroy Armstrong, a senior assistant to the CEO of the PCSC, told The Gleaner yesterday.

While the Government has been quite vocal in stating a desire to see more private suppliers start selling electricity to the national grid, it would appear the PCSC, which is a subsidiary of the Chinese COMPLANT group, has been in a state of readiness for quite some time.

“I cannot give you the numbers right now, but we have realised significant savings from this investment. It has allowed us to become self-sufficient to the point that we have excess energy that we are now offering to sell to the national grid,” said Armstrong, in explaining the situation at Monymusk and Frome.

However, despite the state of readiness of the two factories, Armstrong was not able to say how soon they will begin to supply electricity to the national grid. In fact, he thinks it might not be anytime soon.

“If we get permission and come to an agreement with JPS, there will be other infrastructure that we will have to put in place, so it is not safe for me to give you a timeline for this to be a reality,” said Armstrong.

As part of its drive towards efficiency, the PCSC installed new 75-ton boilers at its Monymusk and Frome facilities. It has also installed two generators that produce 10 and five megawatts, respectively, at each location.

The energy being produced by the factories comes from bagasse, which is the fibrous matter that remains after sugar cane is crushed to extract juice, and is considered to be a biofuel. It is also frequently used as a primary fuel source for sugar mills. When burnt in quantity, it produces sufficient heat energy to supply all the needs of a typical sugar mill, with energy to spare.

The PCSC has been pushing for at least five per cent of off-season bagasse-based energy to be passed on to the national grid and projects that, making use of the process after the sugar season, the 10-megawatt generator could be used to develop bagasse into fuel within the next three years.

Alternative Energy Electricity Government News

More Renewable Energy For Grid

August 26, 2015 Webmaster

Energy Minister Phillip Paulwell said yesterday that he expects renewable energy to comprise 12.5 per cent of the national grid by the end of 2016.

The Office of Utilities Regulation (OUR) has invited interested entities to submit proposals for the provision of new generating capacity from renewable energy sources up to 37 megawatts (MW) to the national grid.

Currently, six per cent of the national grid is supplied by renewables, and this is to increase with the addition of 78MW by March next year with the coming on stream of three new renewable projects.

The National Energy Policy has identified fuel diversification and the development of the country’s renewable energy sources as two of its main objectives. The policy sets a target of having 20 per cent of the country’s energy being generated from renewables by 2030.

“My own view now is that we should aim for 30 per cent. The 12.5 will be achieved next year and we will be the leading Caribbean country in terms of renewables,” Paulwell said.

SYSTEM CAPACITY

Light and power provider, the Jamaica Public Service Company (JPS), supplies consumers from an installed system capacity of approximately 945.1MW.

To date, the highest peak demand registered on the system was 644.4MW. In 2014, annual generation from renewable energy sources accounted for approximately six per cent of total system generation, with contributions of 2.5 per cent and 3.5 per cent from hydro and wind, respectively.

Meanwhile, Paulwell revealed that the net-billing arrangement is to be recommenced next month. The programme was suspended to undertake a review of the performance of the system and Paulwell said “all indications are that it has been doing very well and we, therefore, are going to resume”.

Net-billing is the system whereby the JPS buys excess power from its customers.

LICENCES ISSUED

More than 300 net billing licences have so far been issued by the energy minister, and the suspension of the system was undertaken to evaluate its success.

“We have not achieved the original target to get to 4MW of electricity being generated by that means and also we have not seen any degradation of the grid as a result,” Paulwell said.

But while the Government gets set to resume the net-billing arrangements, JPS has said that the regulatory authorities must institute a special cost system for persons who generate most of their own energy through renewable energy but are still dependent on the grid.

“If you come on for one hour, I have to do the same exact generation that I have to do if you are on for one day,” Kelly Tomblin, JPS president and CEO, told The Gleaner.

But Paulwell, responding to that charge, said “that is an argument that the OUR will have to address. Our policy is to encourage more and more renewables at the individual level.”

The Gleaner

Electricity JPS News

JPS To Invest Up To US$40m In Smart Grid

August 21, 2015 Webmaster

Jamaica’s light and power company is spending up to US$40 million over five years to roll out a smart grid and cut line losses.

Last year, the Jamaica Public Service Company Limited (JPS) reported a one per cent decline in sales along with a one per cent increase in system losses – mostly electricity theft – which drained US$18.4 million in revenue from the company.

Now, Senior Vice-President, Energy Delivery, Technology and Innovation Gary Barrow says the company is spending US$6 million to US$8 million per year over a span of five years on technology upgrades.

That includes the installation of smart meters, which the company has been testing in select homes since at least 2012 under what was referred to as its Smart Grid Interface pilot, according to past reports.

Now, around one-tenth of customers have smart meters installed.

The last 24 months have seen the light and power company quietly acquiring and testing new equipment, pilot-testing new programmes, and doing “systems shakedowns” before large-scale rollouts, said Barrow.

Pivotal to this will be the implementation of the smart grid. This is already giving the company the ability to remotely fix power outages, reroute power, monitor usage, and to start tackling losses that gobble up as much as 26 per cent of the power it generates.

Barrow is downplaying the smart grid as a silver bullet, meaning it will not solve all the problems that drain revenue from the utility, but he said it would put JPS on the cutting edge of technology and within requirements of a modern electricity distribution system

“When you talk about a smart grid, it is really about putting more intelligence into the grid. It is where you start and where you end. That is how the technology is evolving. It is getting the data and using a lot of sophisticated analytical tools that translate that data into information for us,” Barrow said.

The system has distribution automation switches that allow JPS to pinpoint faults and reroute power. Coupled with that is an outage management system that automatically locates outages and manages real-time recovery. The centrepiece of the improvements, however, is the installation of smart meters.

Over the last two years, the light and power company has installed about 60,000 smart meters, which is just about 10 per cent of the 580,000 customers served by JPS.

Consumption Readings

Barrow notes, however, that 65 per cent of revenue comes from customers with smart meters. This is because 100 per cent of all large customers – numbering about 5,000 business – are on smart meters. In addition, they have sought to cover medium-sized businesses and other heavy users.

The commercial applications – commercial automated metering infrastructure, or CAMI – allow JPS to do readings of consumption at 15-minute intervals for all large commercial customers. This information is shared with clients.

JPS also uses MV90 software to analyse if there are any unusual consumption patterns.

The company has also tested and is installing meters on a secondary line of distribution transformers. On a practical level, what that means is that JPS attaches a meter to one leg of the average 220 voltage wires that feed a typical street. This allows JPS to get closer to its goal of reducing line losses.

Barrow says that when the system is fully rolled out, JPS will be able to pinpoint energy theft at the micro level.

“Before, we knew that an entire feeder was suffering from theft, but now, we are actually able to take it down to transformer level. So if only 25 customers are on that transformer and we know that … we are delivering more energy than what we have billed for, now we can pin-point with great granularity where the theft is happening,” the power executive said.

He says JPS is also totting up savings from the smart grid.

“In some areas where we had as much as 50 per cent theft of electricity, just putting in these meters and taking some other actions, we were able to bring that down to two to three per cent,” he told Wednesday Business.

Given those successes, JPS is preparing to go a step further, technologically speaking, with the planned roll-out of “Smarter Smart Meters”, which will allow customers to manage their energy consumption through remote control of the devices in their own homes.

That system is in the final stages of pilot-testing in the upscale Jacks Hill-Norbrook areas of Kingston.

Having committed to the smart grid investment, the monopoly power distributor appears wary of competition from renewable energy systems – possibly under net-metering/net-billing policies that allow persons to generate and sell electricity to the national grid – with Barrow noting the proliferation of photovoltaics, which harness solar energy.

He said what was required is a modernisation of regulations.

“This is a critical success factor or a critical point of failure. I can be talking about all of these things, and if the regulations don’t support it in a way that the business remains viable, then as a country, we will lose out,” he said.

The Gleaner

Alternative Energy Electricity JPS News

Solar Lights Up Red Bank Business

August 16, 2015 Webmaster

The lush green Malvern hills in the distance is in stark contrast to parched lands at Red Bank, St Elizabeth. Almost everywhere, farmers are busy pouring water on their plants, which are, for the most part, fighting an uphill battle against a wicked drought that threatens to bring everyone to their knees.

At Red Bank, there is no piped water, the catchments are dry, and the sun stands overhead like a wicked overseer. But it is not all bad. One man, Denroy Evans, has, for the past year, plugged into the element and is using solar power to drive his businesses.

Evans told The Gleaner that high electricity costs had threatened the survival of his business.

“One day I went to pay my bill and the lady looked at me and said, ‘Mr Evans, wait, a weh yu a burn up deh suh?'” Evans recalled.

He had gone to a bill payment agency in Junction, five miles from Red Bank, to pay a Jamaica Public Service (JPS) bill of $100,000.

“That is when I started to think. I said to myself, ‘If I could save that $100,000 per month, it would be $1.2 millon per year. So why not muscle up and put in the system and save it?'” Evan said.

Invested $4 Million

That was just over two years ago. Since then, he has invested roughly $4 million in a solar lighting system, and hardly has to deal with the JPS.

“With the high cost of energy, you have to find alternative sources. With the introduction of the solar system, we are now paying, depending on the time of the year, $6,000 to $12,000 per month. We have saved 85 to 90 per cent by installing solar, [the cost of] which will be recovered in about three to four years,” Evans told The Gleaner.

The system, which has been mounted on the top of a building that serves as home for a farm store, a supermarket and a variety store, consists of 63 solar panels, 56 batteries, a 6,000 watt inverter, and three controllers for the charging system. It runs some 10 refrigerators, lights, computers, cameras and fans.

“On the average, I pull down about 80-kilowatt (kw) hours per day and use about 75kw hours daily. We get good weather. We don’t get any rain and the sun is always out,” Evans quipped.

He said that the use of renewable energy is definitely the way to go, but cautions that anybody who wishes to invest should first of all educate himself/herself about the system.

“I have seen many people install it and they don’t even go into the battery room to check anything. What results is that the battery runs out of water … you need to be integrally involved in your solar system,” said Evans, who is a trained farmer and one-time teacher.

Light and power company JPS said that it is in favour of Jamaicans maximising the potential of solar and other renewable power. The company said, however, that the regulatory authorities must pay attention to the fact that the cost of operating the national grid is not dependent on the number of users.

“If you come on for one hour, I have to do the same exact generation that I have to do if you are on for one day,” Kelly Tomblin, JPS president and CEO told The Gleaner.

“If you have solar and you come on my system for 10 minutes, I have to build the same amount of infrastructure. If you are going to go solar, go completely solar, or if you are coming on my system, price it so that it reflects the fact that I have to build an exact same power plant and exact same infrastructure,” Tomblin added.

The Gleaner

Alternative Energy Electricity JPS News

JPS Moves Closer To Cheaper Electricity

August 10, 2015 Webmaster

The Jamaica Public Service Company (JPS) has signed an agreement for the long-awaited supply of gas to the island.

The company has announced that it has signed a deal with the United States (US)-based New Fortress Energy for the supply of gas to Jamaica, after receiving approvals from the Government and the Office of Utilities Regulation (OUR).

Under the agreement, New Fortress Energy will provide the JPS with liquefied natural gas (LNG) for its 120-megawatt power plant in Bogue, St James.

The plant, which was first commissioned into service in 2003, is being converted to run on gas instead of the more expensive automotive diesel oil.

“This is a historic moment for JPS and for Jamaica,” said Kelly Tomblin, president and CEO of the JPS.

“JPS has worked since 2012 to procure gas as part our fuel diversification strategy. We are fortunate that we can now take advantage of technology related to gas shipments and supportive US policies that allow the export of gas to non-FTA countries.

“Just today (Friday), Fortress received its permit from the US Government to export gas to Jamaica. JPS is honoured to be leading this game-changer for the energy sector,” said Tomblin.

Support National Goals

The JPS CEO said the introduction of gas will support the national goals of energy security, sustainability and affordability.

“The move to cleaner fuels and more flexible generation will reduce our environmental footprint by allowing Jamaica to optimise our use of renewables while we simultaneously reduce emissions from our baseload generation,” said Tomblin.

According to Tomblin, the JPS has been working closely with the Electricity Sector Enterprise Team, which was set up by the Government to oversee the upgrade and expansion of Jamaica’s energy sector.

The signing of the gas supply agreement has set the stage for work to begin on the infrastructure needed for the delivery of gas to Bogue by early 2016.

Wes Edens, founder and co-chairman of the board of Fortress Investment Group, declared New Fortress Energy’s commitment to investing and creating value in Jamaica.

“This agreement opens the door to a new era of energy diversity and independence for Jamaica and its citizens, enabling the region to benefit from cost-effective, stable supplies of US natural gas.

“Our vision extends far beyond Bogue. This will be the catalyst to establish Jamaica as an energy hub for the Caribbean and Latin America. Jamaica is the ideal location to execute on this vision, and we intend to invest significantly in energy, port and logistics infrastructure on the island. Change takes vision and we applaud JPS, its leadership, and the Government of Jamaica for working tirelessly towards this moment.”

The Gleaner

Electricity JPS News

Price Cut Pipe Dream

January 24, 2015 Webmaster

Jamaicans to bear US$65m Bogue conversion cost, says JPS

Light and power provider, the Jamaica Public Service Company, yesterday warned that customers could be forced to shoulder more than five times the US$15-million price tag they are already set to underwrite for the conversion upgrade of the Bogue plant in St James.

Consumers will fork out a total of US$15m, through a special fund reflected in their bills, over the next year to pay for the changeover of the plant from diesel oil to gas, this after the Office of Utilities Regulation (OUR) approved a cess for the capital works. However, the total cost of the conversion is expected to be about US$80 million.

“The pipelines, as well as storage facilities, represent an investment by the fuel suppliers, who will be recovering the money they have spent for the infrastructure in the cost of fuel,” John Kistle, the senior vice-president for generation and project development at the JPS, told The Gleaneryesterday.

According to Kistle, it would be erroneous to think consumers would automatically benefit from the cheaper fuel soon, as infrastructure costs would be a significant add-on.

“Some of the things we have heard of late is [that there will be a] very short payback and that is based just on the difference in fuel sources. But it is not a short payback given the significant capital required for these terminals and pipelines and the conversion. This is not a US$15-million conversion; it is more expensive when we consider all of the other infrastructure that needs to be put into the island,” Kistle said.

Kistle said further that there are three critical things need to happen in order to convert Bogue to gas. He said first there needs to be a mechanism to bring gas into a terminal and get it on to land. That, he said, has to be a ship-receiving terminal or some method of transporting gas from the ships into a facility that can discharge the gas in either liquid or gas form to the site. The other steps involve transporting the gas from the terminal at the port where it is likely to be collected, and converting the units to receive the gas.

Meanwhile, the JPS executive said the conversion plan is causing major environmental concerns, with the location for the offloading of gas for the plant being a crucial issue.

The JPS is proposing to offload the gas at the Freeport harbour in the resort town of Montego Bay.

“The location is certainly an issue, and we are quite concerned about the environmental constraints, as well as the safety concerns, when you have to bring gas into an operating terminal where there is a cruise ship operation,” Kistle said.

As far as getting the gas into Bogue is concerned, Kistle said the JPS is currently working with the National Environment and Planning Agency (NEPA) and the Port Authority of Jamaica to find a viable solution.

“The Port Authority of Jamaica has very well-documented rules, so we are looking to work with them to bring gas into that harbour, if we are to use that harbour. We are not sure if we have to go somewhere else yet. The Port Authority of Jamaica has been working with JPS, and there are very clear guidelines on what we need to do,” Kistle said.

He pointed out that the guidelines relate to how long a fuel vessel can sit in harbour to discharge “such that we can offload sufficient fuel to run the facility”.

The senior JPS representative said the determination on the way forward will be based on the fuel storage capacity, either at the harbour or at the site, as well as how often a vessel will be required to fill the storage tank.

“There are a couple of options, and we are working with other authorities to understand which of those is an acceptable option. There are a number of constraints that would affect the type of option that we employ,” he said.

“Primarily, we are working with NEPA to make sure that we understand what their issues are,” Kistle added.

The push to convert Bogue to use a gas-based fuel is part of the Government’s plan to reduce the dependence on oil and lower electricity bills. The JPS said the conversion to gas will also save the country millions of dollars each year in foreign exchange currently spent on importing oil.

JPS said the Bogue conversion project will begin as soon as the necessary due diligence is completed and JPS gets the final approval from the OUR.

Daraine Luton, Senior Staff Reporter

Jamaica Gleaner

Alternative Energy Electricity Energy Saving JPS News Solar Energy

Electricity Should Be Based On Long-Term Considerations

June 5, 2014 Webmaster

With reference to your headline article, ‘Solar power risk’ in The Gleaner Tuesday, June 3, I think that our policy decisions in relation to electricity should be based on long-term considerations, such as the amount of foreign exchange spent on fossil fuels, and the threat of global warming, rather than on return on investments.

My initial observation is that we have failed to capitalise on the opportunities provided by solar energy. Neither Jamaica Public Service (JPS) nor the Office of Utilities Regulation has educated the public on the win-win situation, which is possible with net-billing. More people might be interested in applying for net-billing if the application process were quicker, and the steps involved, detailed instructions for which are given on JPS website, were less onerous. Most people are unaware that you do not need batteries to run a solar system if you have a grid-tie with JPS. In fact, going that route is more environmentally friendly and less expensive, as shown by the calculation below.

BUYING BATTERIES

On the whole, companies selling solar systems encourage purchasers to buy batteries. Their pitch is that you can cut your electricity bills and even get off the grid entirely. They also tell you that JPS pays you only half of what you pay JPS per kWh, which is true, but they don’t tell you that batteries would cost more. Also, most people use more electricity in the summer than in the winter. To get off the grid entirely, one would have to install sufficient panels to supply one’s summer needs, and then one would have excess in the winter. It would be better to be able to send the excess to the grid in the winter and draw from JPS if necessary in the summer.

My calculation is based on a monthly average of 200 kWh being sent to JPS in the day, and drawn from JPS at night. (It does not include the excess amounts being sent or drawn). Nor does it take into account escalating costs. I make the optimistic assumption that a battery bank will last for 10 years.

WITHOUT SOLAR PANELS

200 kWh x J$40 = $8,000 monthly x 12 = $96,000 annually x10 years = $960,000.00

With solar panels and net billing (cost corresponding to half of $40.00)

200 kWh x $20 = $4,000 monthly x 12 = 48,000 annually x 10 years = $480,000.00

Savings: $480,000.00

With batteries, no net-billing, cost would be $0, but cost of 16 batteries at $40,000.00 each with life expectancy 10 years max = $640,000.

In contrast, as Mr John Kistle states, JPS would be faced with the challenge of providing everybody with electricity at peak hours after sunset, or on overcast days. Some of that generating capacity would have to be turned off at peak sunshine hours, thus reducing the return on whatever investment was made in a new power plant. However, solar power would cut down on the amount of fuel needed to run the plant.

Given the importance of the cost of electricity to all of us in Jamaica, perhaps there are some other things we can do. Could there be a consensus, for example, on turning off our fridges during peak hours? Or JPS charging different rates at peak hours?

I think that all stakeholders need to be involved in making these hard decisions.

Jamaica Gleaner;

Electricity Government JPS News

Stealing With Impunity

May 16, 2014 Webmaster

We share the concerns of paying customers of the Jamaica Public Service Company (JPS) whose electricity will be turned off for half the day in the JPS’s latest effort to combat electricity theft. Yet, we can’t but empathise with the light and power company, the stealing of a large chunk of whose output is enabled by an irresolute State and compliant politicians.

Put another way, by maintaining an environment that insulates the thieves, the Government has up to now forced JPS to provide social welfare to dwellers of poor communities, which is like imposing a tax on the company for earnings it doesn’t make.

JPS is the sole distributor of electricity in Jamaica. It is a majority ownership by Japanese and Korean interests, representing substantial foreign direct investment – something, given Jamaica’s economic circumstance, our Government declares it is keen to encourage.

For years, JPS has been confronted with the theft of its service. Of the 28 per cent of the output that it ‘lost’ in 2013, 60 per cent went to thieves, translating to hundreds of millions of dollars of unrecovered revenue. Such thievery is often rationalised as the result of the high price of electricity and that it is perpetrated by poor people against a supposedly rich company. The Robin Hood syndrome!

That argument is an inadequate response to the fundamental issues at stake. For instance, with shareholder equity of around US$1 billion, the company’s US$9 million in profit last year represented return on investment of less than one per cent.

Moreover, in the past financial year, the company’s receivables, at 90 days or more, at US$64 million, were approximately six per cent of its operating revenue. Since other customers are unlikely to have been allowed to owe JPS for so long, we can assume that the debt is largely the Government’s, to which must be added the company’s enforced social-welfare expenditure in the form of electricity theft.

That’s not all. That overdue debt has not only cash-flow implications for JPS, but foreign-exchange risks, given that while the company’s income is in Jamaican dollars, the bulk of its expenditure is in foreign currency. Such risks are exacerbated by the company’s declining revenues, which would likely cause unease to the company’s bankers and impact its ability to borrow for new plant and equipment. JPS is hardly in robust health.

Illegal connections removed

Indeed, no company anywhere could be asked to forgo, or hand over as welfare, the value of nearly a fifth of its output. Few could survive. JPS has tried to combat the problem by having 200 employees, or about 15 per cent of its staff, dedicated to the anti-theft effort. Last year, it removed 197,000 illegal connections, approximately one-third of the amount of its registered customer base – from its system. These and other technological solutions have failed to beat the problem. And they won’t.

The solution is primarily political. Indeed, the seven communities against which the JPS has moved, in the capital’s western belt and St Catherine, like others where electricity theft is endemic, are mostly garrison communities, those zones of exclusion where our brand of politics breeds a sense of entitlement and impunity.

That perceived right to trespass on other people’s property can’t be solved by single companies taking civil action or proffering criminal charges. It demands a fundamental shift of political attitudes, combined with a resolute State, especially if the Government is serious about encouraging investment – local or foreign.

Jamaica Gleaner;

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