Jamaica Labour Party Archives - Page 2 of 2

EDITORIAL – Electricity Free-For-All

September 3, 2012 jrobinson

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 Jamaica’s electricity costs are meteoric because of JPS’s outdated plants, which deliver energy inefficiently.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.

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News

EDITORIAL – Mair Getting It Right On Energy

August 2, 2012 jrobinson

On the matter of energy, Gregory Mair has hit upon the right idea. Jamaica should be catholic in its approach.

We should not rule anything out, including, Mr Mair told fellow legislators last week, nuclear energy.

That last point is bound to be controversial, as it was three years ago when the Jamaica Labour Party (JLP), of which Mr Mair is a member, formed the Government and the case for nuclear energy was being pushed by the then Opposition. The suggestion was knocked down by then prime minister, Mr Bruce Golding.

The then proponents of nuclear power, Mr Phillip Paulwell and Mrs Portia Simpson Miller, are now, respectively, the minister of energy and prime minister.

They, clearly, are in a position to reopen and expand the debate. But, more important, Mrs Simpson Miller and Mr Paulwell bring urgency to the process of implementing a mix of available and cost-effective measures to deal with Jamaica’s energy crisis.

Indeed, the Government’s fiscal constraints apart, the cost of energy is perhaps the biggest drag on the Jamaican economy. At US$0.42 per cent per kilowatt-hour, the cost of electricity is not only substantially more expensive than most other countries in this region, but among the largest cost components of Jamaican firms. Expensive energy weakens their competitive positions.

Up to now, we have perceived the solution largely in terms of natural gas, to replace more expensive oil, to fire proposed, more-efficient power plants.

Indeed, the Jamaica Public Service Company (JPS), the light and power company, won a tender for a 360-megawatt power plant to be fired, primarily, by gas.

Further, the Government has just announced that Samsung, the Korean company, has emerged as the preferred bidder for an LNG storage and regasfication facility. It, however, remains unclear, who, and by what arrangement, will supply LNG for that facility.

JPS has projected that the use of natural gas will lower electricity by around 30 per cent, which some analysts say may not be enough to provide a competitive fillip to Jamaican firms.

However, with a new plant, if it is built, and other conversions, no more than 70 per cent of Jamaica’s existing power requirement will be met by natural gas.

Explore cheaper fuels

There is an opportunity, therefore, to explore other cheaper fuels to cover the rest of the island’s power needs and future growth. We agree with Mr Mair that nothing, in this regard, ought to be off the table.

The most immediate possibility is coal, a cheaper fuel than LNG, but with environmental issues that new technologies have substantially lessened. Jamaica must also be aggressive on renewables, such as solar and wind power, doing everything in its capacity to enhance the stability and feasibility of such technologies for the domestic environment.

Not too far in the future also, nuclear power, we believe, should be an option for Jamaica. The idea of small nuclear power reactors of the type that would be useful for a country like Jamaica was not so long ago being viewed with scepticism.

Recently, the United States announced the availability of US$450 million to support the engineering and licensing of small reactors. In this regard, the Americans are playing catch-up. But theirs is an imprimatur that Jamaicans don’t usually ignore.

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