Kelly A. Tomblin

 

The Jamaica Public Service Company (JPS) is willing to consider coal as an alternative fuel source for electricity generation, but it first wants to execute plans to develop the LNG plant to which the Government finally gave the green light just over a week ago.

A University of the West Indies think tank has conducted research which shows that LNG was a less expensive option to oil, but a more expensive alternative to coal-generated energy, which they found was the most efficient source in powering a light bulb.

JPS chief executive officer Kelly Tomblin – a 25-year veteran of the utilities business in the United States and other markets and who took up the position at the light and power supplier three weeks ago – said the company and its shareholders were interested in investing in any long term solution for Jamaica, including coal.

However: “As an outsider, if I look to where we are, I would encourage us to execute on the plans that we’ve all agreed to as a first step,” Tomblin said.

“We believe that long-term fuel diversity is a number one issue,” Tomblin told the

Transformation of the energy sector, to bring more players into the industry so as to achieve greater efficiencies and reduce costs to consumers, was the key focus of the Minister of Science, Technology, Energy and Mining (STEM), Phillip Paulwell, during the first 100 days of his stewardship.

The Minister, recognising that Jamaicans are burdened by the high energy prices, said the time has come to liberalise the sector and introduce a fully competitive arrangement that

Come May 1, consumers will be able to apply for a net billing licence from the Jamaica Public Service (JPS) and the Office of Utilities Regulation (OUR), Minister of Science, Technology, Energy and Mining, Hon. Phillip Paulwell,has announced.

Speaking at the opening of the Jamaica Power Summit 2012 at the Jamaica Pegasus Hotel in New Kingston today(April 19), Mr. Paulwell said that both commercial and residential consumers can apply for the licence.

Net billing is provided for under the new energy licence renegotiated with the JPS.

 

TWENTY-ONE-YEAR-OLD Kimarley Stewart still shudders when he remembers the cold muzzle of a gun pressed against his abdomen. Stewart said he had the frightening experience as he pumped fuel at a service station on Old Hope Road in St Andrew two Sundays ago.

According to Stewart, about 11:00 am three men travelling in a white motor car drove into the station and told him to fill the car’s gas tank. Stewart — who had been serving as a pump attendant there for eight months — complied, but when he tried to collect payment for the gas, he was grabbed by one of the occupants, who, along with his two cronies, brandished guns and threatened him into silence.

According to the JGRA, service stations are reeling from losses due to employee dishonesty.

 

The thugs, he said, then robbed him of his cellular phone, about $3,000 in cash, and drove off without paying for the fuel, which was valued at about $3,000.

According to Stewart, who said the ordeal lasted about five minutes, he was the only attendant serving outside at the time of the heist. Another employee and a security guard were both inside the gas station’s convenience store.

The Cross Roads Police confirmed that the robbery was reported to them and an investigation has been launched.

But even with that done, Stewart is not happy.

The owners of the service station, he said, accused him of organising the robbery, and demanded that he repay the stolen money.

“I asked my supervisor if I would have to pay for the loss and she went to talk to the manager,” he told the Jamaica Observer. “She came back to me and told me that I would have to pay back the money for what had happened.”

That, Stewart said, pushed him to visit the manager, but his employer, he alleged, confirmed the information related to him by the supervisor.

Stewart said he got angry and an argument developed between himself and the manager.

“I said ‘no, I couldn’t pay for that. How can I pay for something that I could not prevent? That does not make any sense at all,” argued Stewart. “His comments were that somebody had to pay for it, and that it was going to be me.”

“I got robbed at gunpoint. I was looking into three guns — one on my belly and two pointing on me,” he said. “And now they are going to ask me to pay back money? These people don’t care about anything but their money,” he said, citing this as his reason for taking his story to the media.

Reflecting on the robbery, he said, “All I was saying was ‘please Lord, don’t let them shoot me’. That was all that was in my mind. I was even preparing to take a gunshot.”

Stewart, who is the eldest of his mother’s four children, said one of his major concerns during the robbery was being killed and leaving his mother behind without his support.

Since last Tuesday, when the argument occurred, Stewart has not returned to work. He said the trauma of the hold-up and the accusation have been too much for him.

But when contacted by the Jamaica Observer last week, one of the owners of the family-operated service station denied Stewart’s claim that he was asked to repay the stolen money. That couldn’t be the case, the operator said, as the robbery was still being investigated.

“We have not had any arguments with him in terms of payment. We are doing our internal investigation, as well as the police are doing their own investigations,” stated the operator, who asked not to be named.

The operator noted, however, that Stewart may have breached standard service procedures, for which he can be held liable.

“When a customer comes up, you ascertain how it is that you are going to be paid and you try to collect the money up front or during the dispensation of the gas,” the owner explained.

“If it is you decide to give the gas and then collect after, then that is at your discretion. If you do not know the person, or if you have any reason to be suspicious, then you try to collect the money up front,” the owner added, questioning Stewart’s reason for not collecting payment before he began serving the men.

A second breach, the owner claimed, was that Stewart had his cellular phone on him at the time of the incident.

Employees are not allowed to have in their possession jewellery or cellular phones while working, he said.

“But we have not drawn any conclusion as to what happened,” the operator continued.

Last Thursday, Derrick Thompson, first vice-president of the Jamaica Gasoline Retailers Association (JGRA) — while noting that he was not informed enough to speak about the incident — said service stations were reeling from losses due to employee dishonesty.

“We have about 300 gas stations locally, and within the network every day or every other day we suffer a robbery, and it comes in many different forms,” he said.

“One, we suffer from employees. Every day that I talk to a [JGRA] member they are losing from their employees. The second thing is that we are being held up by many different people,” he said, noting that despite the employment of security guards and bolstered efforts by the police, gas stations remain targets.

Last month, police arrested three men, seized two illegal firearms, and recovered about $2 million in stolen cash and cheques, following a heist at the Total Service Station on Spanish Town Road in Kingston.

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JAMAICA HAS once again approached its Caribbean neighbour, Trinidad and Tobago, to secure a supply of liquefied natural gas (LNG)

Energy Minister Phillip Paulwell said the advances were made by the new Government as early as February. He said he has had discussions with his Trinidad and Tobago counterpart on the issue.

“We are trying to see if there can be an agreement at this stage in relation to the supply of LNG,” Paulwell told

 

JAMAICA Public Service Company (JPS) has applied for a rate adjustment that could result in a 0.42 per cent increase in light bills.

In its submission to the Office of Utilities Regulations (OUR), the light and power company suggested that it increase its non-fuel rates by an average of 2.09 per cent.

It also asked for an adjustment to the heat rate target that would result in a 1.55 per cent reduction in the fuel rate.

Given that the fuel component of the typical residential customer

 

JAMAICANS no longer have a good reason to complain about high electricity bills, says Roger Chang, president of the Jamaica Solar Energy Association. A cheaper alternative is available.

“There is no valid reason for complaining of high electricity cost. Because there is an option and that option is solar panel systems. It will produce electricity at a ‘levelised’ cost of electricity of just around US10 cents per Kilowatt hour (kWh),” Chang told the Rotary Club of Spanish Town at the Police Officers Club in St Andrew.

“And when you factor in the other costs, the other tariffs, it will work out somewhere between another seven to nine cent. So you are looking at maybe US19 cents per kWh which is still less than half of JPS,” he said.

Insisting that renewable energy is the way to go, Chang argued that when one looks at the cost of electricity over the lifespan of 25 years it works out to about US10 cent per kWh. Consumers are now paying JPS over US45 cents per kWh. “Four times as much.”

However, Chang, who has been involved with solar panels since the 1980s, admitted that there is a place for the Jamaica Public Service.

“If we are talking in the context of solar panels as a renewable energy source, then you will need JPS to make the renewable energy source cost effective and viable. What we effectively have been doing is using the JPS as a battery, as a backup battery. So JPS is cheaper than you can buy and maintain our own batteries,” Chang said.

“You don’t use solar panel as a backup system. It is not cost effective that way,” he cautioned, adding, “It doesn’t make sense that you buy solar panels and batteries and invest hundreds of thousands on a backup system that you don’t use.

JPS rates have not gone down significantly for a very long time, partly because the OUR (Office of Utilities Regulations) has mandated that they should concentrate on making the grid more stable, with fewer power cuts.

“We don’t get power cut as we used to before,” Chang said. “So, a solar panel system with batteries as a backup is not worth it anymore.”

Under a complicated formula, JPS will soon start paying small power genera-tors between US20 cents and US26 cents for electricity they feed into the grid.

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Carlton Davis, Contributor

While all eyes will be turned on Dr Peter Phillips on May 24 on how he composes the Jamaican Budget to achieve, in addition to economic growth and the protection of the vulnerable, meaningful fiscal targets that will not dissatisfy the Washington Consensus and the markets, we must not lose sight of the single most important factor which has plagued the Jamaican economy for close to 40 years: energy.

As I have written and spoken about on a number of occasions, cheap oil was a significant factor in the appreciable economic growth we achieved in the 1950s and 1960s, and expensive oil has been a significant factor in our anaemic growth performance for most of the period since then.

I don’t know how many people are aware that oil was so cheap that in the 1960s, we examined with Mitsubishi, and separately with Kaiser Aluminum, the building of an aluminium smelter in Jamaica. A smelter of the size contemplated required some 200 megawatts of electricity, about one-third of our current average domestic use. However, the quadrupling of oil prices in late 1973 put paid to this.

Skyrocketing prices

We have seen stupendous rises in oil prices, since the beginning of the latter half of the last decade with devastating consequences all round, but particularly the alumina sector, which has seen two plants closed for three years (the loss of production from which is equivalent to US$650 million in gross export earnings!) and the other two barely holding on for dear life.

The rather adverse effects on the domestic home consumer and the Jamaican economy can be illustrated. The average householder uses about 170 kilowatts of electricity per month. At US$0.40 per kilowatt-hour, this is equivalent to US$68 per month, or US$816 per year. If we calculate the cost on the basis of 500,000 such consumers, this represents a spend of US$408 million annually!

Were the price to be lowered to US$0.25 per kilowatt-hour, as is being touted for the new generating unit (Note that as this would represent only 60 per cent of the entire system in the first instance, the average price would be higher), this would translate into increased disposable income to consumers of about US$150 million, which would be a stimulant to the Jamaican economy in the purchase of local goods and services rather than most of it on imported oil.

Important objectives

In light of the foregoing, we have to strive to achieve four important objectives:

1. Replace oil with coal or natural gas, which are both cheaper now and expected to be so over the long term, for the electricity-generating and alumina sectors;

2. Get the country to conserve on its use of energy, regardless of the fuel;

3. Exploit local renewables and wastes in the production of energy to the maximum extent possible and feasible;

4. Rebalance the ratios between the use of public and private transport as a means of reducing our use of gasolene, which is far more expensive than the fuels used by the electricity and alumina sectors.

I consider assisting the prime minister and her relevant portfolio ministers in achieving these objectives as perhaps the most important of my current tasks.

Carlton Davis is special adviser in the Office of the Prime Minister. Email feedback to columns@gleanerjm.com

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