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
Energy Minister Phillip Paulwell (left) is seen here with JPS chairman Hisatsugu Hirai in January 2012 at a reception hosted by Hirai. – File
Power provider, Jamaica Public Service Company (JPS), disclosed depressed quarterly profit of half-billion dollars on Wednesday but avoided accounting for the pending loss of its monopoly status amid court appeals and talks with the Government over securing its exclusive licence. JPS made net profit of US$5.8 million (J$528m) at second quarter June 2012, down 41 per cent compared to year-earlier levels. The company’s reduced profit resulted from a 44 per cent spike in finance costs to US$12.6 million compared with a year earlier. Directors Hisatsugu Hirai and Fitzroy Vidal said in a joint note that it was too early to quantify the impact of the Supreme Court decision that set aside JPS’s monopoly but did not invalidate the licence. “The outcome of this court decision, which the company intends to appeal, cannot be determined with certainty at this time and no provision has been made in the financial statements regarding this matter,” stated the directors on behalf of the board. Hirai is chairman of the power utility. Earlier this week, JPS president and CEO Kelly Tomblin said the company could see its US$450 million of long-term loans placed in default if it loses the legal appeal to keep its all-inclusive licence and if the Jamaican Government refuses to amend the language in the agreement. But it also means that the financing of the near US$620-million planned natural gas power plant is virtually on hold pending the appeal. JPS’ loans were premised on its distribution monopoly arising from its licence, which runs to year 2027. For the half year, JPS made net profit of US$7 million, or one-third the HY2011 results of US$21 million, despite an uptick in revenue to US$581 million. Last month’s Supreme Court ruling invalidating JPS’ monopoly on distribution of electricity was a victory for claimants Dennis Meadows, Betty Ann Blaine and Cyrus Rousseau who challenged the exclusive 20-year licence granted by the then minister of mining and energy to the JPS in 2001. Electricity charges in Jamaica remains one of the highest in the region due to its reliance on expensive oil, which has tripled in price since 2000. JPS’ fuel bill topped US$407 million at half year, rising by more than 10 per cent year-over-year, but was flat at US$201 million in the second quarter. business@gleanerjm.com http://jamaica-gleaner.com/gleaner/20120817/business/business2.html 
The Jamaica Public Service Company, JPS has submitted its report outlining the reasons for the islandwide power outage on the weekend, to the Office of Utilities Regulation, OUR. Corporate Communications Manager at the JPS Winsome Callum told RJR News that several factors contributed to the power outage. She however declined to provide details, stating that a report on the matter was submitted to the OUR today. Sections of the island were left in darkness between midnight Sunday and early yesterday morning. The JPS said it would conduct a probe to determine the cause of the system failure. http://rjrnewsonline.com/news/local/jps-submits-report-islandwide-blackout 
Barring reversals at appeals, for which the administration is likely to lack great enthusiasm, Justice Bryan Sykes may have played a fortuitous hand in favour of Phillip Paulwell, the energy minister. For Justice Sykes, in his ruling on Monday, broke, at least for now, the electricity supply and distribution monopoly of the Jamaica Public Service Company (JPS) – a matter seemed set to be a battle of attrition, if not a noisy war, between Mr Paulwell and the light and power company. Whatever may be the Government‘s strategy going forward, JPS, as has been indicated by its lawyers, is not about to meekly acquiesce to Justice Sykes’ decision. But it is a signal for both sides to recalibrate their conversation and settle on a new, serious and mature discourse on Jamaica’s energy future. The background to these developments is the 20-year (subsequently extended by seven years) licence that was granted to JPS in 2001 by the Patterson administration, of which Mr Paulwell was a Cabinet member, for the exclusive distribution of power. Breaking that monopoly has been a mantra of Mr Paulwell since January, following the People’s National Party‘s return to office after a four-year hiatus on the opposition benches. At upwards of US$0.40 per kilowatt-hour, Jamaican consumers face among this region’s highest electricity rates. It is conventional wisdom that the cost of power is a major drag on the competitiveness of the island’s economy. Mr Paulwell feels competition would drive down costs. He has support among Jamaican consumers who largely blame JPS directly for this state of affairs. They see JPS as neither customer-friendly nor efficient, but able to leverage its monopoly to remain profitable. Two consumer groups and an individual manufacturer brought a class-action suit challenging the minister’s authority (Bobby Pickersgill at the time) under the Electric Lighting Act to have granted JPS an exclusive licence for the transmission and distribution of power. Justice Sykes rejected the claimants’ argument that under Section 3 of the law, there was no provision for a single supplier of electricity, and that the minister, therefore, had no power to issue an all-island licence. What was wrong, the judge argued, was the pre-emption of the opportunity of other potential licensees. The problem of the current licence Said Justice Sykes: “The statute does not give the power to the minister to grant a licence on terms which effectively bar any other applicants from being considered. This, in the opinion of the court, is the problem of the current licence to JPS. The minister has committed himself and his successors to a situation in which there is no possibility of change for the required 20 years (which has been extended), even if new technology or a new company has a better and cheaper way of doing what JPS is doing.” That, effectively, is the argument of the anti-JPS lobby – and Mr Paulwell. This week’s ruling does not immediately affect the JPS’s ability to operate, as its licence, but for its exclusivity, remains valid. Further, Mr Paulwell has no other application on his desk. Nor are there protocols for interconnection on the JPS grid. Clearly, other potential players will be emboldened by the ruling. They will receive encouragement from consumers. It is time for constructive engagement. 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/20120801/cleisure/cleisure1.html 
The Jamaica Public Service Company, JPS, is to challenge yesterday’s Supreme Court ruling regarding the exclusivity of
THE Supreme Court yesterday ruled that the all-island licence held by the Jamaica Public Service (JPS) is not exclusive, paving the way for other players to enter the market for distribution of electricity. The ruling by Justice Bryan Sykes was immediately hailed by Hugh Wildman, attorney for the claimants, as a major victory. “It is a major victory, because the claimants have been able to break the monopoly licence,” Wildman told reporters following the handing down of the ruling.
“What the court is saying is that the exclusive nature of the licence is illegal; that is what this judgement has done. We have succeeded in the main declaration,” said the attorney. Yesterday, Justice Sykes told the court that the minister had the right to grant a licence to a single light and power provider to cover the entire island, but that the minister does not have the power to grant a licence on terms that preclude him from considering any other applicant. “That is not what Section 3 [of the Electric Lighting Act of 1890] in my view, intended. The exclusive licence to JPS did that,” said the high court judge. Said the judgement: “The minister does not have the power to grant a licence upon terms that bars the possibility of any other person entering the market for transmission of electricity. The term of JPS’ licence granting it exclusive right to transmit electricity is not valid.” Michael Hylton, QC, who appeared for the JPS, told the Jamaica Observer that his client would be appealing Justice Sykes’ ruling. The claimants
Citizens United to Reduce Electricity (CURE) is celebrating the landmark decision handed down in the Jamaica Supreme Court today in which the monopoly license of the Jamaica Public Service Company (JPS) was declared invalid and illegal.
Barbara Gayle, Justice Coordinator Supreme Court Judge Bryan Sykes has ruled that the monopoly power distribution license granted to the Jamaica Public Service Company (JPS) is not valid. In his ruling handed down a short while ago, Justice Sykes said the minister does not have the power to grant a license on terms which prevent other applicants from having their applications being considered genuine. The judge also said the minister does not have the power to grant a license upon terms that bar the possibility of any other person entering the market for the transmission of electricity. As a result, the judge says the terms of the JPS license granting it exclusive right to transmit electricity is not valid. However, the judge says the minister has the authority to grant a license to an operator to supply power to the entire island. The group Citizens United for the Reduction of the cost of Electricity had radio@gleanerjm.com
Barbara Gayle,
ELEVEN PERSONS yesterday collected the first batch of net billing licences offered by the Government that will allow them to sell the excess electricity they generate to the national grid. Energy Minister Phillip Paulwell, who handed out the licences, said having installed a solar-energy system at his home, he intended to apply to his ministry for a licence. “My PV (photovoltaic) system is fully up and running and I am now anticipating my JPS (Jamaica Public Service Company) bill later this month,” said Paulwell, who was speaking at a meeting of the Jamaica Energy Council held at Jamaica House yesterday. Under the net billing system, licensees are expected to see huge reductions in their electricity bills after balancing the amount owed for energy used and what is earned from the excess energy sold to the grid. “The bill from JPS is netted against the bill from the production and at the end of the month, the net bill to the customer,” explained Hopeton Heron, deputy director general at the Office of Utilities Regulation (OUR). “At the end of three months, you will see whether you owe JPS or JPS owes you and a cheque is cut somewhere to settle the matter,” he added. The system will be governed by a five-year standard offer contract that each licensee is required to sign. Addressing concerns about the impact of adding new facilities to the grid, Heron said for the next two months, the OUR will be conducting a pilot project that will limit the new connections to two per cent of the existing capacity. Paulwell said he hoped this would encourage more Jamaicans to come forward and apply for licences as “the Government looks to enlarge its ambition in relation to renewable energy“. http://jamaica-gleaner.com/gleaner/20120519/lead/lead2.html  |