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NWC can produce more power than JPS – Chang

November 3, 2016 Webmaster

Dr Horace Chang says if given the green light from the utilities regulators, the National Water Commission (NWC) could generate even more power than the Jamaica Public Service (JPS).

Chang, who has responsibility for water in the Ministry of Economic Growth and Job Creation, said that currently the NWC’s biggest expense is its electricity bill, which averages around $450 million monthly.

“Of course, if the water supply company is allowed to generate its own power without any kind of guidance or regulation, we could end up producing more power than JPS. If we have hydropower, we can produce so much; we have lands we can produce solar power and not only remove ourselves from the grid in terms of supply sources,” Dr Chang argued.

He was addressing the final day of the three-day 14th Annual Conference of the Organisation of Utility Regulators last Friday, held at Secrets Resort and Spa in Montego Bay, St James.

He called on the utility regulators to examine the relationship between utilities.

“Can exception be made [in] how you do it and in what way it is done that it doesn’t end up superseding the other? That’s maybe the biggest question,” Dr Chang said. “Regulators have to create the framework in which the company itself can move forward; the broader policy of ownership is decided by the Government.”

The water minister explained that under the current arrangement, if the NWC or the National Irrigation Commission were to “produce power for itself and reuse it”, they would have to first be awarded a licence by the Office of Utilities Regulations.

“Under the current regulator, if you produce power, move it from one venue to the next, you need a licence. And if you are doing a licence, it has to be competitively awarded and that creates challenges,” he argued.

“Certainly, I think we can produce power on site, which we intend to do in a couple of our local outlets, but that raises some challenges.”

Another challenge he highlighted was wheeling, which refers to the scheduling of the energy transfer from one balancing authority to another. Since the wheeling of electric energy requires use of a transmission system, there is often an associated fee which goes to the transmission owners.

“The challenge here is not only wheeling for commercial purposes [and] home users, but since a water company can produce water in large amounts, the question of wheeling within the head of the utility becomes relevant. It is something that needs to be addressed,” Dr Chang said.

“The real impact of water is, it also has a social impact, but it has to be produced at an economical rate. And power becomes one of the big cost factors. For irrigation, in fact, we might not be able to provide our southern plain — which is our major provider of food supply — with irrigated water if we don’t have the right to produce some of the power for ourselves, because farmers cannot afford to pay the JPS bills.”

Jamaica Observer

Electricity JPS News

NWC Says Energy Savings Passed On To Water Customers

March 8, 2015 Webmaster

The state-owned National Water Commission (NWC), Jamaica’s largest consumer of electricity, said that savings from its energy bill are being passed on to consumers.

Lower oil prices has resulted in cheaper electricity bills from Jamaica Public Service Company. NWC’s monthly bill has fallen to about $400 million at present.

“Yes, the NWC has been positively impacted by the reduction in oil prices. Our bills from JPS have gone down to just over $400 million per month, whereas before it was hovering above $500 million per month and in some instances it had exceeded $600 million,” Charles Buchanan, public relations manager at the NWC told Sunday Business.

Buchanan said that for most of calendar year 2014 the NWC, and by extension its customers, would not have benefited from the reduction in energy prices because for most of that time electricity rates were still very high. However, both the company and consumers started seeing the benefits since November 2014.

Buchanan explained that there is a mechanism built into the NWC’s tariff which is adjusted based on changes in the company’s three most significant costs: the cost of energy based on the electricity bills, the foreign exchange rate given that about 70 per cent of its operations involves purchases of items such as chlorine, fittings and meters; and the Consumer Price Index, which relates to other inputs.

“Those three things together are considered under the Price Adjustment Mechanism which customers see on their bills as PAM,” he said.

“Let’s assume that they are all going in the same direction, whenever they change it will cause customers’ bills to change in that same direction.”

Buchanan said each of the three elements are weighted by the Office of Utilities Regulation and that the size of their adjustments would determine the impact on PAM.

“So let’s say the energy price is going down and by itself would result in a reduction in the PAM, but the CPI and the exchange rate are going in the opposite direction, depending on how significant the movements are, whether the exchange rate changes are small or great or whether the energy cost reduction is small or great, as well as the relative weighting of those components it will determine whether PAM comes out on the net as a positive or negative movement,” he said.

Significant Movement

“But I can tell you that the movement in the energy prices has been significant enough to have overcome any other contrary movement in the CPI and or foreign exchange rate over recent months. As a result, for the last few months the price adjustment mechanism for the customers has been beneficial to the customers in the sense that it is represented on their bills as a deduction from their water charges,” he added.

NWC has some 1,000 locations across Jamaica that require electricity.

In 2011, its annual bill to JPS was $5.503 billion; $5.904 billion in 2012; $6.285 billion in 2013, and $6.464 billion in 2014.

“In all instances there was a continuous climb in the dollar value of the energy costs,” said Buchanan.

However, the NWC has put in place energy management initiatives which resulted in its kilowatt per hour usage hovering at around the same place or slightly declining.

For example, in 2011 the NWC’s kilowatt/hour usage of energy was 197.17 million, but it moved downward to 188 million in 2014. “This is despite the fact that we had put in a number of new water supply and waste water systems,” the NWC spokesman said.

Buchanan adds that there was a four per cent decrease in the NWC’s energy consumption in 2014 when measured against 2011. Consequently, the commission was expecting a four per cent reduction in its electricity bill, but instead there was a three per cent increase in the energy cost to the NWC over the period.

Asked about the percentage reduction to customers over the past three months, Buchanan said it was difficult to give a figure due to PAM being a combination of three elements.

“It’s a little complicated to give an exact figure … but definitely the bills have shown declines,” he said.

Jamaica Gleaner

News

Water company moves to make JPS type profits…

September 7, 2011 jrobinson

Please click above to see the bill and to read the NWC’s response to what the K Factor and X Factor charges are on your water bill. It was timely since today the Observer published the article below about a private water company wanting to raise clients bills in St Catherine up to 132%. Yes I wrote 132% but if JPS can get away with that type of billing why shouldn’t the water companies.