JUST over one week ago, new Jamaica Public Service CEO Mrs Kelly Tomblin, having spent just over a month listening to the various stakeholders in JPS, particularly its customers and employees, revealed to the Observer Monday Exchange that she had never seen an electricity company facing such a difficult and complex set of challenges.
This was despite the fact that in her group she is normally brought in to deal with difficult situations requiring some form of turnaround. Indeed, many years ago, her first job in the electricity industry was at the infamous Three Mile Island nuclear plant in the United States, the scene of a near meltdown, and now part of the literature on how not to handle a crisis.
Mrs Tomblin was, of course, saying no more than the truth. In addition to facing legal challenges concerning some of its practices, such as back-billing, and its licence (the latter reflecting the overall legal and regulatory risk the company is facing), JPS has lost the trust of its customers, and even, Mrs Tomblin suggested, its employees.
One example of the former is that a group of Jamaica’s largest, most influential, progressive and innovative companies came together to publicly demand electricity competition. More generally, every householder and business in Jamaica, both rich and small, awaits with trepidation the monthly arrival of their electricity bill, over which many feel they have no control. Even JPS shareholders are clearly not happy with the many changes of ownership in just over a decade.
Despite the view of the man in the street that JPS is rapacious, a US$34-million profit on US$1.2 billion in sales is not particularly high, and could even be described as inadequate, given routine capital expenditure of US$40 million to US$50 million, and particularly against the huge increase in investment required over the next few years.
On the positive side, JPS shareholders have, according to Mrs Tomblin, the long-term view required to make the new investments. The decision to move ahead with the new LNG-powered electricity plant means the long-delayed decision on Jamaica’s future fuel source appears to have finally been made.
When Liquefied Natural Gas (LNG) was originally mooted as Jamaica’s preferred fuel source over coal, there were legitimate concerns over the paucity of suppliers, particularly without a guaranteed supply from our Caricom partner Trinidad. However, the huge increase in the production of shale gas has collapsed natural gas prices in the United States, which now appears poised to become a major world supplier of gas.
In Japan and South Korea, the respective home bases for the current owners of JPS, all natural gas supplied for electricity generation comes through their own LNG terminals, suggesting they will have readily transferable expertise available to Jamaica in this still emerging area.
The starting point to rebuilding trust in JPS will be for Mrs Tomblin to continue to listen to the emotional pain of her customers, and empower her front line employees, all of whom know very well what is going on.
Mrs Tomblin appears to understand that, when in pain, neither customers nor her employees will care about the needs of JPS until it is clear that the business cares about them. Her current posture of emphasising listening, observing and acknowledging, rather than trying to explain or rationalise, reflects a necessary emotional intelligence that appeared to be missing from former top management.
She is off to a good start.
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