Investors willing to pump capital into renewable energy projects in Jamaica won’t have to make a one per cent downpayment when making their bids to the regulator.
In stead, they will have to submit the proposal security of one per cent of the total project cost to the Office of Utilities Regulation (OUR) after their project has been given the greenlight.
KINGSTON, Jamaica
Monopoly power distributor, the Jamaica Public Service Company (JPS), has reported a two-thirds drop in its annual net profit to US$12.7 million (J$1.18b) following flat sales last year.
Kelly Tomblin, JPS president and CEO, all but blamed the losses on “reduced consumption, at least for paying customers”. She spoke at the Jamaica Chamber of Commerce forum on energy at the Knutsford Court Hotel in Kingston.
JPS revenues dipped by almost US$12 million to US$1.14 billion (J$106b) for the year, according to financials published on the Jamaica Stock Exchange.
Dividend payments to its Asian and Jamaican owners were slashed year-on-year resulting in a more than 200 per cent rise in cash to US$27.7 million for its year ending December 2012.
The power utility paid out US$5 million in ordinary dividends compared with US$44 million a year prior when net profit amounted to US$34.35 million.
The utility is owned by Japan’s Marubeni Corporation, 40 per cent; South-Korea-based Korea East-West Power (EWP), 40 per cent; Government of Jamaica, 19.9 per cent; while 3,000 shareholders own the remaining 0.1 per cent of the shares.
EWP became a shareholder in April 2011 when it acquired the 40 per cent stake previously held by Abu Dhabi-based TAQA.
The company recorded a slight increase in fuel costs which totalled US$777 million for the year ending December 2012, compared with US$765 million in the prior year. Such costs are usually passed on to customers.
Working capital also increased to US$147 million from US$139 million year-on-year.
Equity increased US$7.6 million to US$387 million year-on-year.
The cost of fuel, as well as old inefficient plants, has weighed on the company’s service delivery and its bottom line. JPS has presented Government with its own proposal to develop a new energy plant but has not disclosed the proposed fuel mix.
The OUR says it will respond to that proposal, as well as others from potential investors in renewables, in March.
business@gleanerjm.com
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Monopoly power distributor, the Jamaica Public Service Company (JPS), has reported a two-thirds drop in its annual net profit to US$12.7 million (J$1.18b) following flat sales last year.
Kelly Tomblin, JPS president and CEO, all but blamed the losses on “reduced consumption, at least for paying customers”. She spoke at the Jamaica Chamber of Commerce forum on energy at the Knutsford Court Hotel in Kingston.
JPS revenues dipped by almost US$12 million to US$1.14 billion (J$106b) for the year, according to financials published on the Jamaica Stock Exchange.
Dividend payments to its Asian and Jamaican owners were slashed year-on-year resulting in a more than 200 per cent rise in cash to US$27.7 million for its year ending December 2012.
The power utility paid out US$5 million in ordinary dividends compared with US$44 million a year prior when net profit amounted to US$34.35 million.
The utility is owned by Japan’s Marubeni Corporation, 40 per cent; South-Korea-based Korea East-West Power (EWP), 40 per cent; Government of Jamaica, 19.9 per cent; while 3,000 shareholders own the remaining 0.1 per cent of the shares.
EWP became a shareholder in April 2011 when it acquired the 40 per cent stake previously held by Abu Dhabi-based TAQA.
The company recorded a slight increase in fuel costs which totalled US$777 million for the year ending December 2012, compared with US$765 million in the prior year. Such costs are usually passed on to customers.
Working capital also increased to US$147 million from US$139 million year-on-year.
Equity increased US$7.6 million to US$387 million year-on-year.
The cost of fuel, as well as old inefficient plants, has weighed on the company’s service delivery and its bottom line. JPS has presented Government with its own proposal to develop a new energy plant but has not disclosed the proposed fuel mix.
The OUR says it will respond to that proposal, as well as others from potential investors in renewables, in March.
business@gleanerjm.com
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Energy minister Philip Paulwell yesterday announced a counterintuitive measure that will delay the vetting of new power plant proposals in order to fast-track their approval.
The electricity regulator Office of Utilities Regulation (OUR) will now advise Paulwell on the acceptance or rejection of proposals by March 30 instead of the original month-end deadline.
The extension saves these projects from a lengthy retendering which could last years. Such a delay would stall plans to slash the island’s high energy costs while threatening future blackouts.
“I have enabled them with a further period of time to the end of March to do their contemplation. They have received from JPS (Jamaica Public Service Company), and others, new proposals and they wish to study them carefully because the OUR and myself agree that time is of the essence, and we do not want to lose any more time – because the decision has to be taken now,” said Paulwell on Tuesday at the Jamaica Chamber of Commerce forum on energy in Kingston.
“And rather than start the whole process again, once there is a prospect of pursuing a path of lower electricity prices, we want to implement it quickly,” he said.
JPS, the monopoly power distributor, submitted a proposal that incorporates an undisclosed fuel source as an alternative to its 360-megawatt natural gas plant, but the OUR requests additional information.
Approving these plants would usually result in public procurement of a fuel supplier which could take months or years. Paulwell would obviate this process via parliamentary approval.
“You could treat a proposal as an unsolicited offer, at which time, the Government can sign off on it and forego the need for procurement,” he explained.
The OUR will allow JPS until Friday, March 15 to submit details of an alternative proposal for provision of electricity-generation capacity. This was in response to a letter, containing a broad summary of its latest offer, sent on Thursday, January 31 by the JPS.
“The JPS and its stakeholders had missed its deadline of Wednesday, January 30 to complete the requirements under the request for proposal (RFP) for the 360MW project, and so the alternate proposal could not have been considered within the context of the RFP,” said the OUR in a media release on Tuesday.
The OUR said several other companies have expressed interest since the termination of the RFP process. Those companies also have until March 15 to “concretise” unsolicited submissions into firm proposals.
The OUR release stated that JPS missed another deadline granted to facilitate the provision of project details, including pricing and supplier.
“This was the third extension granted by the OUR to JPS … . They were given until January 30, 2013 to complete the outstanding matters relating to the bid,” said OUR.
In late 2011, JPS was awarded the right to construct a 360MW plant, which followed the issuance of an RFP from the OUR. The plant was supposed to be the largest of a planned 480MW programme.
The 360MW would have replaced old power plants with units fired by cheaper fuel, and add new capacity to the grid to maintain pace with the national energy demand.
steven.jackson@gleanerjm.com
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Daraine Luton,
The Office of Utilities Regulation (OUR) last night opened a window of opportunity for firms wishing to submit proposals for a new electricity generating plant that would use liquefied natural gas (LNG) as its main fuel source.
According to the regulator, it will complete its review of the current proposal by the Jamaica Public Service (JPS) and other expressions of interest by the end of next month.
“Following the completion of this review, the OUR will formulate an opinion as to the feasibility of the offers and advise the Government whether it is worthwhile to proceed to finalise negotiations with any of these companies, including JPS,” the State agency said in a news release.
“This gives all entities which have expressed an interest, including JPS, a window of opportunity for a review of their proposals before the OUR returns to the market, if necessary,” the regulator said.
“The OUR will then await Government’s decision whether to sole source the project, which seems most feasible by way of readiness and also achieves the overall objective of reducing electricity prices in the shortest time. If such a project cannot be identified, then the OUR will go back to invite public tender,” it added.
The decision comes after the OUR, on February 1, informed the JPS and its shareholders that it had terminated the request for proposal (RFP) process in relation to the 360 MW project.
The OUR said it ended the process after JPS missed a third deadline on January 30 to complete the requirements under the RFP for the 360 MW project and had requested a 30-day extension.
But the JPS explained that the project scope changed significantly since 2011 when it was granted approval to proceed with construction of the plant.
“JPS’ role initially was simply to construct the plant, but late last year the company was asked to take on the additional responsibility of identifying a supplier and managing the process of procuring the LNG,” the light and power company’s President and CEO Kelly Tomblin said, adding that JPS has not participated in fuel procurement in the past.
Tomblin said that, despite her company’s best efforts, the market is not supporting earlier estimates of LNG prices as low as $8.50 mmbtu. “We have received indicative prices of upwards of $12.50 mmbtu for LNG and the related infrastructure, which we estimate would result in a reduction of approximately 20 per cent in electricity costs,” she explained.
Last night, the OUR said it has given JPS until Friday, March 15, to submit details of an alternative proposal for provisioning of electricity generation capacity.
“This was in response to a letter, containing a broad summary of its latest offer, sent on Thursday, January 31, 2013 by the JPS,” the OUR said, adding that it has advised the responsible minister of this process and he is in concurrence.
The OUR said that several other companies have expressed interest in providing electricity (generation capacity) since the termination of the RFP process.
“Those companies have also been given until March 15, 2013 to concretise their unsolicited submissions into firm proposals,” the regulator said.
“A meeting was held with JPS, following which the OUR informed the company that it would be allowed to submit the details of what is now considered an unsolicited proposal. The OUR will only entertain firm proposals in a state of readiness to be finalised with minimal negotiations. The proposals must be to provide electricity only and must be accompanied by the relevant fuel supply and other financing agreements,” the regulatory agency said.
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The Office of Utilities Regulation (OUR) has given the Jamaica Public Service Company (JPS) until March 15 to submit the details of an alternative proposal for supplying 360 megawatts of power to the national grid.
Earlier this month, the OUR had announced it had ended the request for proposal process with the JPS for the 360 megawatts power plant.
A day after missing the January 30 deadline to provide final details of how it would undertake the project, the JPS had made an alternative proposal to the OUR.
But in a release last night the OUR said the company
The Office of Utilities Regulation (OUR) has given the Jamaica Public Service Company (JPS) until March 15 to submit the details of an alternative proposal for supplying 360 megawatts of power to the national grid.
Earlier this month, the OUR had announced it had ended the request for proposal process with the JPS for the 360 megawatts power plant.
A day after missing the January 30 deadline to provide final details of how it would undertake the project, the JPS had made an alternative proposal to the OUR.
But in a release last night the OUR said the company