KINGSTON, Jamaica – Opposition Spokesman for Industry, Commerce and Energy, Gregory Mair, is blasting Government’s handling of the energy sector.
In a release to the media Mair said inaction on 10 consecutive weeks of increasing gas prices, high electricity rates and Petrojam
KINGSTON, Jamaica – Minister of State in the Ministry of Science, Technology, Energy and Mining (STEM), Julian Robinson, says Jamaica is ripe for investment in renewable energy.
Following a recent assessment of the rates paid to people who generate energy which is then sold to the grid, a recommendation is now on the table that will make it more attractive for investors to invest locally, said Robinson said, adding this will bring significant benefits to the energy consuming public.
Since the start of 2012, the Jamaica Public Service Company (JPS) has lost more than US$30 million as a result of electricity theft. This, as the company continues to absorb the cost of the fuel used to produce much of the electricity that is illegally abstracted.
“About 14 per cent of the electricity produced by JPS is stolen, and the cost of this theft is shared by both JPS and our customers,” says Kelly Tomblin, JPS president and CEO. “In addition to the financial losses associated with electricity theft, JPS is spending another US$30 million each year on efforts to curtail the problem. Despite this investment and the dedication of more than 200 employees to fighting losses, the problem persists,” she said.
JPS has utilised a number of strategies in its fight against electricity theft. These include the installation of anti-theft systems in communities with high levels of losses, account audits, investigations, removal of illegal lines, and supporting the police. Since the start of the year, 38 persons have been arrested for illegal abstraction of electricity, more than 5,700 meter irregularities have been discovered, and 14,000 illegal ‘throw-up’ lines removed across the island.
“We continue to explore additional ways of dealing with this problem, as persons are getting more and more innovative in their illegal use of electricity. JPS needs the support of everyone – the Government, customers, the police, and community leaders to address this problem because it affects every sector of society,” the JPS CEO explained.
It’s one of the costliest crimes plaguing Jamaica, but few people recognise the scope and gravity of this parasitic add-on.
The Jamaica Public Service Company (JPS), the monopoly distributor of electricity across the island, lamented this past weekend that it has lost US$30 million to electricity theft so far this year, and spends another US$30 million annually on technology to curb the piracy. Combined, that represents the equivalent of J$5.4 billion that inflates the cost of power to Jamaican households and businesses teetering on the edge of survival.
“About 14 per cent of the electricity produced by JPS is stolen, and the cost of this theft is shared by both JPS and our customers,” says Kelly Tomblin, JPS’s president and CEO.
Of course, that’s not the whole story. Jamaica’s electricity costs are meteoric because of JPS’s outdated plants, which deliver energy inefficiently.
Energy cost, as this newspaper has repeatedly emphasised in these columns, is the most crucial factor behind the uncompetitiveness of the Jamaican economy. This handicap puts Jamaica at a severe disadvantage internationally and against regional neighbours such as Trinidad and Tobago, on which misplaced rage has been directed for its one-sided trade relationship, on which Jamaica is running a deficit of nearly US$1 billion on mostly oil imports.
Scores, if not hundreds, of businesses that have foundered name electricity cost to be among the main reasons, if not the primary one, for their collapse. Jamaica pays up to US$0.40 per kilowatt-hour for energy – JPS will be quick to remind that August’s rate was eight cents cheaper – six times that of Trinidad and Tobago.
Phillip Paulwell, the energy minister, has been a vigorous cheerleader for the dismantling of the monopoly, which he believes will drive down costs to consumers.
Mr Paulwell predicates his vision for a liberalised electricity sector on foreign investors indulging their appetite among a Jamaican population willing to give its hand to the suitor with the sweetest proposal. But Mr Paulwell’s romanticised notions seem to ignore the compelling reality that investors may not gamble money on Jamaica’s unreliable national security structure.
LAW AND ORDER ON HOLIDAY?
The maintenance of law and order is the fundamental role of government, the glue that holds society and the economy together. It is on that score that the Jamaican Government has been found wanting.
JPS, which has decades-old roots in the Jamaican economy, may be less minded to disengage because of the breadth of its capital investment, even if it has to spend an extra US$30 million a year. A new company, however, may be less inclined to yawn at such write-offs for crime.
Politicians of both the ruling People’s National Party and the opposition Jamaica Labour Party have generally winked at the problem of electricity theft. Most inner-city communities are cobwebbed with illegal connections. And unscrupulous business operators and wealthy suburban householders are big on the gig. The police do little to prevent it.
The numbers bear the tale. According to JPS, “Since the start of the year, 38 persons have been arrested for illegal abstraction of electricity, over 5,700 meter irregularities have been discovered, and 14,000 illegal ‘throw-up’ lines removed across the island.” But that’s a drop in the bucket.
Government had better get serious about electricity theft. Or its overtures to investors might be equated with wooing a lover without the vow of protection.
The opinions on this page, except for the above, do not necessarily reflect the views of The Gleaner. To respond to a Gleaner editorial, email us: editor@gleanerjm.com or fax: 922-6223. Responses should be no longer than 400 words. Not all responses will be published.
http://jamaica-gleaner.com/gleaner/20120903/cleisure/cleisure1.html
PREPARATIONS for round two in the battle over the legality of the Jamaica Public Service’s (JPS’) all-island licence stepped up yesterday with the filing of a counter appeal to JPS’ own filing in the appellate court on Monday.
The counter appeal was filed by former Government Senator Dennis Meadows, Betty-Ann Blaine and Cyrus Rousseau, who were in July successful in having Justice Bryan Sykes strike down the exclusivity aspect of the JPS licence.
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TOMBLIN
At the risk of revocation of poetic license, allow the liberty to suggest that Shakespeare’s Hamlet, faced with Jamaica’s high energy charges, would have voiced his soliloquy thus: “To conserve, or to produce: that is the question:
Whether ’tis more arduous on the pocket to suffer The slings and arrows of outrageous energy bills, Or to produce from the abundance of sun and wind, And, by such deed, oppose the tide of oil importation?” A simple example will explain. If your energy consumption was 500KWh (kilo-Watt Hours) per month (equal to about 42 barrels of oil over five years) and a cost of about $220,000 annually and if, somehow, you had access to a facility of up to $1.5 million to resolve this, what are your options? A renewable energy system (RE) – solar panels and/or wind turbine using the full $1.5 million could be installed. Or, for about $450,000, the solution could be energy conservation measures (EC) such as changing out bulbs to LEDs, tinting windows, photo cell switches, insulating the roof, use of inverter technology for fridges air-conditioners and practicing stringent energy management etc. If the strictest EC measures are adopted up to 175KWh per month may be saved and so, after expenditure on EC, there would still be an annual electricity bill of about $145,000 for 325KWh (27 barrels of oil over five years) saving $75,000 annually. This is a best case (or wishful thinking) scenario which assumes flat or stable oil prices over the next five years At the end of EC however, your electricity bill may only be reduced by 35 per cent and so, when you take the inflation in energy charges into account, you may have saved some oil but you could be back to square one financially! Conservation may not therefore be the answer and so consideration must be given to another option to answer the question “to produce or to conserve”? As it is in so many instances in life, the answer is in the grey area – neither EC nor RE but a combination of both. If, after EC, consumption is reduced from 500KWh to 325KWh then install a 325KWh RE system and use a portion of the annual savings to carry out the EC measures – a combined approach. An achievable target could be to reduce consumption by an average of about 44KWh annually over five years after commissioning your RE system. Nothing would be done to attract expenditure until the end of the first year after accumulating the savings in electricity bills and the expensive EC measures would be accomplished over years two to five. After one year the consumption would be reduced from 500KWh to 455KWh. After two years consumption is reduced from 455KWh to 410 KWh while production remains at 325KWh. At the end of five years consumption equals production. At the end of year one, savings is about $140,000 and this increases annually until the end of the fifth year when the electricity bill becomes zero and $220,000 is saved that year and afterwards. In five years the energy rates would have increased and the savings would be more in dollars and cents. Oil used by this combined approach would be about 7 barrels compared to about 27 barrels if only EC were employed but after 5 years of RE plus EC no oil would be used at all! Excellent from the economic viewpoint but the financial reality is that, the combined approach demands repayment for the $1,500,000 capital cost of the RE system. At the most concessionary rate over 10 years this would be near $192,000/year. Therefore, for the first three to four years (depending on how much energy cost increases), the monthly repayment for the RE system plus energy charges from the electricity provider would significantly exceed the original electricity charge. This reason is that after five years the savings in electricity bills would be about $900,000 of which about one-half would have been expended in EC measures leaving only $450,000 to pay the $960,000 finance charges. But this does not mean that RE is not financially feasible! Now, if EC only were employed the expenditure would only be about $450,000 which, under the above conditions would attract a finance charge of under $60,000 annually against saving $75,000 each year. Financially feasible but there is still the question of the continued use of oil. This is a classic case for government intervention – brilliant economic gains (including oil savings and carbon credits) but significant negative financial consequences if attempted under conventional banking practices. The solution is a combination of creative, out-of-the-box initiatives including bulk purchases by the Government and loans with a two to three year moratorium ideally from the petrocaribe fund which appears to have been set up for just such a situation. And so, back to the revised Hamlet, who, in his time, only appeared to have bigger problems because he was not faced with Jamaica’s high energy charges. Be not be inspired by what he was talking to himself about however, as a means to escape expensive energy regimen. “Thus independence does make heroes of us all; And thus the self-generation revolution Is strengthened with creative thought, And enterprises of great pith and moment Will flourish throughout the land And doff the yolk of fossil oppressors. Be all their sins remember’d.” Robert Evans is a practicing engineer. Read more:
Chairman Paul Scott (left) and Managing Director Byron Thompson are seen here at Seprod Limited’s annual general meeting held at Wyndham Kingston hotel in New Kingston, on Monday, August 20. – Rudolph Brown/Photographer
Marcella Scarlett,
JAMAICA won’t grow unless its energy cost is halved within three years, by Chris Zacca’s reckoning. The Private Sector Organisation of Jamaica (PSOJ) head aims to push national energy policy in this direction.
“We are strengthening our energy committee at the PSOJ, and I will chair the new committee,” he said. “The PSOJ will need to play a mediating role in bringing all the parties together on this issue to forge an indivisible national consensus and strong action.” Zacca believes that lack of economic growth reflects a failure of national leadership, and not just politically. “We at the PSOJ must critically reflect on our motto Free Enterprise and Watch Jamaica Grow,” he said, while questioning why the lobby group has not succeeded in making our motto a reality. “This reflection must consider whether the private sector itself has not been united,” Zacca told an audience attending the panel discussion at the SALISES Fifty-Fifty conference at the Pegasus hotel on Monday. He also questioned whether some sectorial lobby groups have been pushing their agendas over national interest. “Has this contributed to an economy where there are painfully few examples of Jamaican entrepreneurship?” he asked. His response: “I think so”. Zacca proposed major steps that the group would take towards a comprehensive approach to national development, starting with efforts to unite the lobby groups towards this end. “Once united, we need to partner with the Government and civil society to promote the creation of a policy framework that enables competiveness and productivity, and a business-friendly environment,” he said. “On this front I am happy to say that the Honourable Prime Minister has told me that she intends to restart the Partnership discussions between Government, the Private Sector and Civil Society.” Other thrusts will be focused on reducing the ABCs of bad governance
Gary Barrow -File
Gary Barrow will join the Jamaica Public Service Company (JPS) on September 3 as a senior vice-president in charge of customer operations and support services. Barrow was once the president of telecom LIME Jamaica, when it traded under its old name, Cable & Wireless Jamaica. His track record, however, spans other disciplines, including finance, business transformation, government relations, power systems and process re-engineering, said JPS. Barrow’s appointment comes as JPS is attempting to re-engage Jamaicans and put some polish on its tarnished image. Jamaicans are upset at the more than 40 US cents they are paying to consume power provided by the monopoly distributor. JPS President Kelly Tomblin is shooting for “a total transformation” of JPS culture. In that vein, Barrow will have “overall responsibility for transmission, distribution and our parish operations, and so will play a key role in helping to change the way we serve our customers. Gary’s extensive leadership experience, along with his track record of successful business transformation, will definitely be an asset during the culture change process at JPS,” Tomlin said. business@gleanerjm.com http://jamaica-gleaner.com/gleaner/20120822/business/business3.html 
James McNish, |
