Participants listen attentively to Mauricio Pulido, Texaco CEO. - Contributed
Participants listen attentively to Mauricio Pulido, Texaco CEO. – Contributed

GB Energy-Texaco celebrated its first retailers conference of 2013 with a complete agenda on business strategy, service stations’ performance, logistics and maintenance, customer service, and most important, the company’s vision for the business in Jamaica.

Mauricio Pulido, GB Energy’s chief executive officer for Jamaica, welcomed retailers and expressed thanks for their loyalty, confidence and collaboration in the company’s success.

After outlining the profile and scope of GB Group and its businesses within the Caribbean to participants, GB Energy’s executives presented the vision and commitment of Texaco in Jamaica – becoming the leader in the market in several aspects of the business including: quality of service, high operational standards, product offering, brand recognition, gasolene additive, customer service and safety.

“By mastering all aspects of the business, being consistent with our high performance standards and working together as a team, we will reach our objective and become the number-one brand of preference for customers in the petroleum industry throughout the island,” Pulido said.

During the conference it was announced that GB Energy will keep the Texaco brand, as well as its commitment to society, through social programmes in areas such as health, education and environment.

AWARDS PRESENTED

A highlight of the conference was the the presentation of awards for their exceptional performance to dealers. Categories such as safety, wet-stock management, million-gallon award, highest-volume award and customer-first champions.

President of the Jamaica Gasolene Retailers Association (JGRA), Derrick Thompson, noted his pleasure at initial gestures from the company, and the open and frank discussions between Chevron’s management and retailers.

“The retailers’ concerns were on the mark and the responses to the concerns were frank. I wish GB group all the best in navigating the Jamaican territory,” Thompson said.

The conference took place at the RIU Club hotel in Ocho Rios, St Ann, with the participation of 56 retailers islandwide and and Texaco’s executives Mauricio Pulido, David Sterling, Howard Henry, Marcia Johnson, Garfield Edwards, Cyville Martin, Dumile Morgan, Heather Daley-White, Andrea Smith, Edmond Lobban, Antonette Lawman, George Simpson and Latoya Winter.

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TOMBLIN:
TOMBLIN:

Arthur Hall, Senior News Editor

The Jamaica Public Service Company (JPS) is expressing concern that the long-running problem of electricity theft could cause its demise.

“For the JPS this might very well be the death knell … . There is no business in Jamaica that can lose $2 million to $3 million per month and still be viable, so for us it has reached a very critical point,” declared JPS President and CEO Kelly Tomblin yesterday during a media briefing.

Tomblin underscored that the JPS was at a financial precipice and could fall because it is in breach of a debt covenant which could trigger a demand for it to pay off US$425 million in debt.

According to Tomblin, the financial state of the company is worsened by electricity theft which triggered a penalty of US$30 million last year. That more than doubled the US$12.9 million which the JPS recorded as profit for the year.

“It is causing deteriorating financial performance that keeps me from doing many of the things that my team and I want to do to improve customer service,” Tomblin told journalists during a media briefing at the JPS’ New Kingston office.

“It is not just the theft, but it is also the penalty that we get because of the theft, so we are up against it and we don’t know how to combat,” added Tomblin.

Illegal connections removed

She said for the first three months of this year more than 54,000 illegal connections (throw-ups) were removed; 75 persons arrested and approximately 36,000 electricity audits conducted.

The JPS has also intensified the introduction of its Residential Automated Metering Infrastructure (RAMI) tamper-resistant metres with more than 22,000 persons connected at a cost of approximately $1,000 each. In addition, a special unit has been established to go after the commercial entities and other large users involved in electricity theft.

But Tomblin noted that these measures have not significantly reduced the level of electricity theft across the island.

“Estimates are that we still have 150,000 or up to 200,000 households stealing electricity and that’s against the backdrop of less than 600,000 customers … that could be a third of the people stealing so that is significant.”

Multifaceted approach

According to Tomblin, the problem of electricity theft has to be addressed in a multifaceted way because it is a socio-economic problem that cannot be addressed only by the JPS.

“We have a goal in the country that 100 per cent of Jamaicans should have access to electricity … but everybody cannot afford electricity, so what is the stop gap or the bridge? There is also the community acceptance of theft because we don’t see persons being arrested in droves.”

Tomblin argued that the root of the problem is crime and poverty and until these problems are addressed electricity theft will continue.

She charged that there needs to be tighter legislation with harsher penalties for electricity theft, even as she noted that the JPS does not benefit from the arrest of persons caught stealing electricity.

The JPS boss added that it needs the input of several different governmental and non-governmental organisations to come up with new measures to deal with the problem of electricity theft.

“We all have to get around the table and say let’s find a different solution because this one isn’t working.”

arthur.hall@gleanerjm.com

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KELLY Tomblin yesterday reiterated the dire financial state of the Jamaica Public Service Company (JPS), and expressed disappointment that two State-owned sugar companies in Clarendon and Westmoreland allowed residents of neighbouring communities to steal electricity amounting to more than $100 million.

“We have about 230 people, we are spending a lot of money each year working on preventing theft. Those people are out in the community, serving my customers, helping to figure out how to get smaller payment frameworks and doing other customer service, improving reliability,” Tomblin told a news conference at the JPS head office in New Kingston.

Jamaica Public Service Company President and CEO Kelly Tomblin addressing a news conference at the JPS head office in New Kingston yesterday.

“What happens when theft of service occurs. For JPS, it may very well be the death knell. Last year, we were fined by the OUR $30 million, that’s two-and-a-half times our total profit and we again submit that there is no business in Jamaica that can lose two to three million dollars a month and still be viable,” she said, adding that the company is facing bankruptcy as it has broken several covenants with its lenders.

“So for us it has reached a very critical point. This has led to us being in breach of our financial covenants. We have been in breach since last year and we continue to be in breach. What that means is that there is a covenant in our loan agreement with our lenders that said we would maintain a specific EBITDA (earnings before interest, taxes, depreciation and amortisation) to debt ratio and we haven’t met that, and we haven’t met it for a year,” Tomblin said.

She said that the company’s lenders have been granting it waivers, but JPS is not earning enough to meet its debts.

“That is a violation of our agreement, and now we have a lender that has not given us a waiver,” she said.

“So in the US, we call it a financial cliff; we call it a precipice here, but the fact remains that JPS cannot be viable in the current framework.”

Tomblin spoke to the electricity theft issue affecting the sugar estates in an interview with the Jamaica Observer after the news conference.

“It shocks the conscience,” she said, “because if you drive around right now you see it [electricity theft] everywhere. We [Jamaicans] have become very immune to it and I think that is what has gone on here.”

Yesterday’s Observer lead story reported Agriculture Minister Roger Clarke as saying that the Government will have to fork out $200 million to remove illegal connections set up at the sugar plantations.

Disconnecting the illegal connections, Clarke said, was the “only outstanding matter” in negotiations with the new owners of the factories, Pan Caribbean Sugar Company, to invest in a US$100-million sugar refinery.

For years, residents in neighbouring communities were allowed free access to electricity and irrigation water which cost the sugar company $100 million in additional costs annually. The $200 million is being sought to pay for a regularisation programme for the affected communities.

Yesterday, Tomblin did not say whether the regularisation process had started, or if the Government had paid any portion of the regularisation costs.

She, however, bemoaned the debt the Government had incurred for electricity, and said the State will have to pay up if the JPS is to remain viable.

“We certainly have difficulty collecting from the Government, and of course the Government has had its woes,” Tomblin said. “But remember, we bill the Government in Jamaican dollars and we have to pay most of our suppliers, including Petrojam, in US dollars. So the longer they take to pay us, the more detrimental it is to JPS.

“So we really do need to get everyone to be current, and for the Government to repay JPS what it owes us,” she said.

In the meantime, Tomblin said that new measures are to be implemented to detect electricity theft by major organisations which, she said, is harder to detect than those set up by ordinary citizens.

Jamaica Public Service Company President and CEO Kelly Tomblin addressing a news conference at the JPS head office in New Kingston yesterday.

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There is so much talk and slow action about implementing alternative energy sources these days. Without a doubt, Jamaica will benefit from any decrease in cost for energy, but has anybody stopped to think of what will happen if we do not formulate firm strategies to manage consumption in all spheres of our daily life?

As it exists now, our main supplier of electricity is unable to generate the amount of power to meet its demands, and whether our dreams of rates US 14 cents per kwh becomes a reality or not, we must think outside of the box in an effort to control consumption.

Office equipment, especially computers, are often left on after use in the office. (PHOTO: AP)

For the most part, energy saving activities are centred around the use of household appliances, lighting, and air condition units, which consume the most electricity. However, there is not as much enthusiasm expressed in the public domain as to how companies should effectively manage their power consumption.

It is believed that by now, organisations would have been proactive with fully developed programmes in engaging their team members in the importance of keeping their operational costs down by carefully managing the use of electricity.

However, as these organisations become more dependent on information technology to drive efficiencies in their operations, there is usually a correlative increase in power consumption. In many cases, this increase could actually be greatly curtailed, but on the other hand, IT mangers who orchestrate equipment usage are never usually concerned with cost containment.

Desktop and laptop computers usually account for the majority of technology equipment used in most companies, and this is where the haemorrhaging of electricity takes place, simply because these units are left on for long periods when not in use.

Individuals in most organisations cannot be relied upon to shut off their computers when not in use for long periods, particularly at the end of the day and Friday evenings.

The continuous waste of power inhibits the Jamaica Public Service Company to meet its demands for power in areas of the island which have never been privileged to have this modern convenience many of us take for granted.

Organisations that operate more than 50 or more computers are at serious risk of inflated JPS bills because of this type of oblivious behaviour. The associated costs of operation really add up when tabulated on a per annum basis.

Let us do some simple mathematics:

If your PC is on for left idle for 16 hours each week day after the usual eight hour work day and on weekends for a full 48 hours :

The total wasted hours per week is (16 x5) weekday + 48 weekend= 128 hours

Per Year this adds up to 128 x 52 (weeks) = 6656 hours

Each computer uses 128W = (6656 x 128)/1000 = 822kwh

Cost for Electricity Per KW/h in Jamaica is US$0.44

Total Cost for wasted electricity per computer per year is 882 X $0.44 = US$375

The kilowatt hours used in the computation does not include hours that computers may be idle during the work day.

This figure may not seem like a whole lot but consider those large corporations in Jamaica that have 500 to 1000 + employees. If 200 computers were to be left running for those hours per annum then that corporation will be looking at a whopping J$7,425,000 ($US375 x 200 x ROE J$99 = US$1) in payments to JPS.

These are not just costs that are impacting the private sector. This dilemma is every taxpayer across the nation’s problem. Our government employs more people than any private sector organisation and the waste in electricity throughout the various ministries is staggering.

The government owns approximately 80,000 computers. If just 20,000 are to be left on for 128 hours then the cost to taxpayers is over J$742.5 million. The current public sector bill for electricity is over J$1.2 billion per month which will grow as the government strives to modernise its operations.

Many companies have introduced energy conservation awareness programmes which are created to help their employees to better understand the impact of their action on the companies’ bottom line; however the benefits are usually short lived. The senior management in these large organisations must look at other ways they can manage these processes with a view to ensuring a more favourable outcome.

The implementation of software applications which do not require human intervention, which will shut down these computers when not in use is in fact available and organisations at risk should look at the available options coupled with its awareness programmes.

While cheaper sources of energy are still a far ways off, the issue of power generation by the JPS will always be a problem that will never go away if conservation is not tackled in a very serious way.

Dean Johnson is a specialist in information technology, sales and marketing. You can email him at energybugja@gmail.com.

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Energy Minister, Phillip Pauwell. - File
Energy Minister, Phillip Pauwell. – File

Jerome Reynolds, Gleaner Writer

The Jamaican and Venezuelan governments are to work out a new payment deal under PetroCaribe, which could see Jamaican cement being sold in that market under a special arrangement.

The Energy Minister, Phillip Pauwell says, the Venezuelan government gave its assurance the deal will continue during a PetroCaribe summit on the weekend.

Paulwell says the Jamaican Government is grateful for the continuation of the deal by the

 

altMinister of Finance and Planning, Dr. the Hon Peter Phillips (right), in discussion with Minister of Transport, Works and Housing, Dr. the Hon. Omar Davies, before he closed the 2013/ 2014 Budget Debate in the House of Representatives on May 1.

The Government, through the Development of Bank of Jamaica (DBJ), has made some $360 million in loans available for the implementation of energy efficiency and renewable energy projects across various sectors.

 

Minister of Finance and Planning, Dr. the Hon. Peter Phillips, in closing the 2013/2014 Budget Debate on Thursday, May 1, in the House of Representatives, informed that residential customers can access up to $3 million.

The loans are available through financial institutions at an interest rate of 9.5 per cent and the money is repayable over eight years.

The Jamaica Energy Council (JEC) is to hold talks on the selection process for the three bidders for the construction of a 360-megawatt generating plant.

Phillip Paulwell, minister of science, technology, energy and mining, has directed that the agenda for the next meeting, scheduled for Friday, May 17, include a presentation by the Office of Utilities Regulation (OUR) on the process for selecting the enterprise for the plant.

The announcement of the meeting follows a request from Opposition Spokesman on Industry Gregory Mair, who told the minister that a meeting was necessary to ensure “transparency and good governance“.

Mair requested that at the meeting of the JEC, the OUR be asked to explain the process by which it would engage the three bidders and if it would consider the late proposal, and if so, why.

Mair said also that the OUR must be made to state whether the 30 days would be sufficient to make a final decision and on what basis a bid would be selected as the winning proposal.

Mair said he also expected that the OUR would defend the winning proposal before the JEC board prior to the final recommendation being sent to Cabinet.

“This, in my opinion, will allow the private sector, the Opposition, and other stakeholders to understand the procedure and participate in this critical national project and, as such, ensure that we are all satisfied that the process was transparent, fair, and that all stakeholders are supportive of the final recommendation going to Cabinet,” Mair said.

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THE Government, after more than 10 years trying to divest the Petroleum Company of Jamaica Limited (Petcom), has set up an enterprise team for the privatisation of the entity.

“Mr Erwin Jones, chairman of Petrojam, will lead this team. We are currently having a valuation of the company’s assets done and we will announce more as information becomes available,” Energy Minister Phillip Paulwell told Parliament yesterday during his contribution to the 2013/14 Budget Debate at Gordon House in Kingston.

Petcom has a service station network of some 28 stations in Jamaica

 

Paulwell, arguing that Petcom has been a strategic asset in the petroleum marketing sector, said he hoped that the entity would remain a strong player in the market. “Again, I encourage local investors to participate in the ownership of this important Jamaican asset,” the minister told the House.

Petcom

THE EDITOR, Sir:

Hardly a day goes by without me hearing of electricity theft from Jamaica Public Service Company (JPS) supply lines. What about armoured cable? Has JPS tried this?

Twin armoured cables are made up of a minimum of five layers of insulation, the individual insulation of the two conductors, an overall insulation of these two, then comes the armour rap which in the low cost cables is normally made from aluminium and finally the outer insulation.

Steel armoured cables are considered the best. The 16mm steel armoured cables come in at about US$600 per 100 metres.

I know that there are many Jamaicans who are very ingenious at theft – and not much else – but unless one calls the Grim Reaper and asks him to stay away, it would be a very brave person, or possibly a fool, who tries to make a connection to an armoured cable without first switching the power off and using the correct tools.

You can’t connect to an armoured cable by throwing up a hook! Yes, I know that future legal connections to such a line will take longer and cost more, but it is a one-off payment. This will, in the end, cost less than going to and fro to remove illegal connections or throwing up hands and saying, “We don’t know what else to do.” We can’t go on like this!

JPS does not (I stand corrected) have any means of determining the difference between line loss which varies and theft, but as it is allowed to charge you and me for that which is guessed theft, why bother to go to the expense of putting up armoured cables in predominantly theft areas.

PHIL FOSTER

croc@cwjamaica.com

St Elizabeth

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