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News

More power for Kingston

August 2, 2012 jrobinson

Jamaica Energy Partners (JEP) has added its new 66 megawatt (MW) power plant at West Kingston to the national grid. Conduit Capital Partners, the US-based parent of JEP and a private equity investment firm focused on energy in the region, said it began “commercial operations of (its) West Kingston Power Project in Jamaica”, yesterday.

The new plant is expected to reduce the overall amount of energy lost to heat by the numerous generators that supply the power grid by a little more than 0.5 per cent.

The new Jamaica Energy Partners plant will produce 66 megawatts of power for the capital.

But Kingston will still have to import some 60 MW from other regions as the number of plants operating in the capital city fall short of the 340 MW peak demand.

JEP’s third plant to come into operations brings the independent power provider’s capacity up to 190 MW, and Kingston’s installed generation to 286 MW.

Plans on JPS’s drawing table include the construction of a US$475-million, 100-megawatt petcoke fuel plant at Hunts Bay, Kingston. But that is part of the second phase of a liquefied natural gas (LNG) project, which will first see JPS build a US$600-million, 360-MW plant in Old Harbour, St Catherine, running to 2014.

JEP broke ground on the US$126-million West Kingston power plant in December 2010. The new system is powered by engines that can run on natural gas, but will start operations using heavy fuel oil.

Jamaica is still a way off from using natural gas, having just last week announced the preferred bidder — Samsung C&T — to build a Floating LNG regasification and storage facility.

The West Kingston plant will sell energy under a 20-year power purchase agreement with Jamaica Public Service Company, the national utility. It is expected to create 60 permanent jobs, and was financed by the World Bank’s International Finance Corporation.

Conduit reacquired Jamaica Energy Partners and the right to develop the West Kingston Power Project through the firm’s Latin Power III Fund in mid-2009

News

EDITORIAL – Mair Getting It Right On Energy

August 2, 2012 jrobinson

On the matter of energy, Gregory Mair has hit upon the right idea. Jamaica should be catholic in its approach.

We should not rule anything out, including, Mr Mair told fellow legislators last week, nuclear energy.

That last point is bound to be controversial, as it was three years ago when the Jamaica Labour Party (JLP), of which Mr Mair is a member, formed the Government and the case for nuclear energy was being pushed by the then Opposition. The suggestion was knocked down by then prime minister, Mr Bruce Golding.

The then proponents of nuclear power, Mr Phillip Paulwell and Mrs Portia Simpson Miller, are now, respectively, the minister of energy and prime minister.

They, clearly, are in a position to reopen and expand the debate. But, more important, Mrs Simpson Miller and Mr Paulwell bring urgency to the process of implementing a mix of available and cost-effective measures to deal with Jamaica’s energy crisis.

Indeed, the Government’s fiscal constraints apart, the cost of energy is perhaps the biggest drag on the Jamaican economy. At US$0.42 per cent per kilowatt-hour, the cost of electricity is not only substantially more expensive than most other countries in this region, but among the largest cost components of Jamaican firms. Expensive energy weakens their competitive positions.

Up to now, we have perceived the solution largely in terms of natural gas, to replace more expensive oil, to fire proposed, more-efficient power plants.

Indeed, the Jamaica Public Service Company (JPS), the light and power company, won a tender for a 360-megawatt power plant to be fired, primarily, by gas.

Further, the Government has just announced that Samsung, the Korean company, has emerged as the preferred bidder for an LNG storage and regasfication facility. It, however, remains unclear, who, and by what arrangement, will supply LNG for that facility.

JPS has projected that the use of natural gas will lower electricity by around 30 per cent, which some analysts say may not be enough to provide a competitive fillip to Jamaican firms.

However, with a new plant, if it is built, and other conversions, no more than 70 per cent of Jamaica’s existing power requirement will be met by natural gas.

Explore cheaper fuels

There is an opportunity, therefore, to explore other cheaper fuels to cover the rest of the island’s power needs and future growth. We agree with Mr Mair that nothing, in this regard, ought to be off the table.

The most immediate possibility is coal, a cheaper fuel than LNG, but with environmental issues that new technologies have substantially lessened. Jamaica must also be aggressive on renewables, such as solar and wind power, doing everything in its capacity to enhance the stability and feasibility of such technologies for the domestic environment.

Not too far in the future also, nuclear power, we believe, should be an option for Jamaica. The idea of small nuclear power reactors of the type that would be useful for a country like Jamaica was not so long ago being viewed with scepticism.

Recently, the United States announced the availability of US$450 million to support the engineering and licensing of small reactors. In this regard, the Americans are playing catch-up. But theirs is an imprimatur that Jamaicans don’t usually ignore.

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/20120731/cleisure/cleisure1.html

News

Jamaica Broilers Lights Up Chicken Houses With Solar Plan

July 13, 2012 jrobinson

Baldwin Atkins (left), contract poultry farmer, meets Phillip Paulwell (second right), minister of science, technology, energy and mining, just before the start of a press conference to announce roll-out of the Best Dressed Chicken Cost Containment Initiative, held at Atkins’ Farm at Osbourne Stores in Clarendon on Wednesday, July 11. Dr Claudette Cooke (second left), Jamaica Broilers Group’s marketing executive, and president and CEO Christopher (right) look on. – Ian Allen/Photographer

McPherse Thompson,

News Oil
Industry Minister Outlines Impact of Oil Bill

July 12, 2012 jrobinson

Minister of Industry, Investment and Commerce, Hon. Anthony Hylton,

Minister of Industry, Investment and Commerce, Hon. Anthony Hylton, says that approximately 29 per cent of the country

News
Electricity Rates Not Falling Along With Fuel Costs

July 12, 2012 jrobinson

Jamaica is hoping to establish a floating LNG barge like this one found on the website of the US Federal Energy Regulatory Commission, posted courtesy of www.lngoneworld.com.

A plunge in the price of natural gas has made it cheaper for utilities to produce electricity. But the savings aren’t translating to lower rates for customers. Instead, United States electricity prices are going up.

Electricity prices are forecast to rise slightly this summer. But any increase is noteworthy because natural gas, which is used to produce nearly a third of the country’s power, is 43 per cent cheaper than a year ago. A long-term downward trend in power prices could be starting to reverse, analysts say.

“It’s caused us to scratch our heads,” says Tyler Hodge, an analyst at the Energy Department who studies electricity prices.

The recent heat wave that gripped much of the country increased demand for power as families cranked up their air conditioners. And that may boost some June utility bills. But the nationwide rise in electricity prices is attributable to other factors, analysts say:

In many states, retail electricity rates are set by regulators every few years. As a result, lower power costs haven’t yet made their way to customers.

Utilities often lock in their costs for natural gas and other fuels years in advance. That helps protect customers when fuel prices spike, but it prevents customers from reaping the benefits of a price drop.

The cost of actually delivering electricity, which accounts for 40 per cent of a customer’s bill on average, has been rising fast. That has eaten up any potential savings from the production of electricity.

Utilities are building transmission lines, installing new equipment and fixing up power plants after what analysts say has been years of underinvestment.

This may reverse what has been a gradual decline in retail electricity prices. Adjusted for inflation, the average retail electricity price has been drifting mostly lower since 1984, when it was 16.7 cents per kilowatt-hour.

“The ratepayer is going to have to foot the bill,” says David Wright, vice-chairman of the South Carolina Public Service Commission and president of the National Association of Regulatory Commissioners.

PRICE INCREASE EXPECTED

The average US residential electricity price is expected to be 12.4 cents per kilowatt hour for the June-to-August period, up 2.4 per cent from the same time last year. For the full year, electricity prices are expected to rise two per cent.

In a typical summer month, that would mean an extra $3 on a residential bill, which includes the cost of generating the power and delivering it to a home, plus local taxes and fees.

Electricity pricing is complicated, and it differs from state to state. In states where power providers are allowed to compete, such as Texas, Pennsylvania and New York, customers can shop around for cheaper electricity, although delivery charges are still set by regulators.

Natural gas has plummeted in price because of a dramatic increase in US gas production over the past few years and a warm winter that allowed supplies to build up.

Even though coal accounts for 38 per cent of all power produced in the US, natural gas plays an outsized role in determining the price of electricity.

The price paid for electricity from the last power plant fired up to meet demand at any given moment is what sets the wholesale price for a given region. And since gas-fired power plants are usually the most expensive, they tend to be fired up last.

– AP

http://jamaica-gleaner.com/gleaner/20120712/business/business1.html

JPS News
Solar powered government buildings in the works for Barbados

July 5, 2012 jrobinson

All public street lights in Barbados will be replaced with energy efficient lamps.

There are also plans to retrofit at least 12 government buildings with solar power systems.

This

News Oil
Oil Price Spikes

July 4, 2012 jrobinson

Renewed tensions between Iran and the West pushed oil to its highest level in more than a month.

Iran is again threatening to block a critical Persian Gulf shipping route in response to a European embargo of Iranian oil. Iran has sparred for months with the West over its nuclear programme.

Benchmark US crude added US$3.91, or 4.7 per cent, to end at US$87.66 per barrel in New York. That’s the highest price since May 30.

Brent crude, which sets the price of oil imported into the United States, rose above US$100 for the first time in three weeks, adding US$3.34, or 3.4 per cent, to finish at US$100.68 per barrel in London.

Iran said Tuesday that it test-fired several ballistic missiles, including a long-range variety meant to dissuade an attack by Israel or the US.

The New York Times

News
Cashing In On Waste

June 26, 2012 jrobinson

Hundreds of jobs to be created as Canadian firm heads to Jamaica to construct solar-powered recycling plant

Sheena Gayle, Sunday Gleaner Writer

Western Bureau:Canadian-based recycling company Panther Corporation will build the first solar-powered recycling centre in Jamaica, representing a multibillon-dollar investment and the prospect of thousands of jobs being created.

The company will invest US$26 million to construct and outfit a 30,000 square foot modular facility in Retirement, St James, in proximity to the Retirement Dump, something the company’s president and director, Michael Mosgrove, is excited about.

“It was a perfect fit for Jamaica and for us because of the sunlight. In addition, the demand for recycling in Jamaica is huge right now,” the Canadian investor told

News Oil
Oil Prices Fall On Global Economic Concerns

June 12, 2012 jrobinson

Oil fell Monday on the realisation that a short-term fix in Spain won’t offer a long-term solution to Europe’s debt crisis.

A multibillion-dollar bailout loan for Spain’s banks generated initial enthusiasm in the global stock, bond and energy markets. But by the close in New York, the good feeling had given way to scepticism.

Benchmark oil fell $1.40 to $82.70 per barrel in New York. Brent crude, which is used to price international varieties of oil, dropped 81 cents to $98.66 per barrel in London. The broad S&P 500 stock index fell nearly one per cent.

Leaders of European countries agreed over the weekend to lend Spain up to $125 billion to help its troubled banking system. Spain is the fourth European country after Greece, Portugal and Ireland to request financial help since the debt crisis began.

Oil jumped above $86 per barrel in trading in Asia. But the relief was temporary, replaced by concern over Spain’s ability to repay the money. The potential for Greece to abandon the European currency still hangs over the market, as does a deepening recession in Italy. That turmoil, as well as slowing economic growth in China and the United States (US), is reducing demand for oil, gasolene and diesel fuel.

It’s not yet clear whether Europe’s ongoing efforts to put the financial crisis to rest will result in an economic turnaround. “It just doesn’t seem like that’s very close,” said Michael Lynch, president of Strategic Energy & Economic Research.

Meanwhile, oil supplies continue to build despite ongoing weak demand around the world.

US oil production topped six million barrels a day in the first quarter of 2012, which was a 14-year high, according to the Energy Information Administration. Most of the increase was the result of more production in North Dakota, Texas and the Gulf of Mexico.

Oil’s decline was tempered by data showing China imported nearly six million barrels of crude a day in May. That was about 10 per cent more than April and 18 per cent more than a year earlier. China is a huge importer of oil and other commodities.

Meanwhile, motorists are continuing to see a steady decline in pump prices. The national average for gasolene fell less than a penny overnight to $3.54 per gallon, according to AAA, Wright Express and the Oil Price Information Service. That’s 19 cents less than a year ago. Gas has dropped 50 cents per gallon in a little more than two months.

Natural gas dropped 8.1 cents to $2.218 per 1,000 cubic feet. The price has plunged about 50 cents in three weeks as supplies remain well above normal levels.

In other trading, heating oil fell 3.64 cents to $2.638 per gallon and gasolene dropped 2.86 cent to $2.657 per gallon.

– AP

http://jamaica-gleaner.com/gleaner/20120612/business/business2.html

JPS News
OUR Pares JPS Back Billing To Two Months; Six Years For Exceptional Cases

June 12, 2012 jrobinson

A JPS technician at work. – File

The Office of Utilities Regulation (OUR) last Wednesday slashed in half the period in which power provider Jamaica Public Service Company Limited (JPS) can back-bill customers.

Under the JPS Revised Back Billing Policy, the company can now back-bill for two billing periods, equivalent to two months, down from four periods. But there are instances in which the utility will also be able to collect for electricity usage extending back six years.

The two-month measure mainly allows JPS to rectify incorrect or under billing or to collect in instances where bills were not generated due to internal system faults.

Importantly back-billing for meter tampering and fraud remains at six years, while corrections to overbilling arising from a JPS error or omission also remain at six years.

“This is not to be described as a victory for anyone because it is the means by which the regulator is bringing balance and fair play to a system which had been out of step with international norms,” said Michael Bryce, director of consumer & public affairs at the OUR.

“In terms of cost, it is not about how much it will cost but about how much can be recovered. This cannot be quantified until each case is completed and judged according to merit,” he said.

Revised policy

The revised policy is supposed to align with best practices in the United States and United Kingdom, and protect both JPS and its customers.

Queries to JPS on the impact of the revision on its operations went unanswered up to press time. The power company‘s annual revenues now tops US$1.15 billion or J$99.9 billion.

Last year, the OUR directed JPS to revise its back-billing policy and procedures in accordance with recommendations contained in the reportInvestigation of the JPS Billing and Metering System for Electricity Consumption.

The independent investigator and former OUR director general, J. Paul Morgan, concluded that JPS’s back-billing policies did not accord with “best practices” and did not sufficiently protect the rights of customers.

“Under the revised policy, there is now a reduction in the maximum period – from four to two – for which an account can be back-billed in several instances,” said the OUR in a release explaining the measure.

JPS is now required to issue the Revised Back Billing Policy as a Code of Practice and make it publicly available in accordance with Condition 16 of the Amended and Restated All-Island Electric Licence of 2011.

Unauthorised benefit

Last year, JPS recorded US$105 million (J$9b) in unbilled revenue, which represents estimates of the heat rate, system losses rate, fuel rate and Independent Power Provider or IPP charges, other non fuel rates and unbilled quantity. Unbilled revenues rose 19 per cent above 2010 levels.

“In cases where the account is not registered in the JPS Customer Information System or the meter is not included in the JPS meter database – dummy meter – and therefore was never billed, and the non-registration in either case is not due to an error or failure by JPS, the account shall be back-billed or adjusted for the period for which the customer/user received the unauthorised benefit but not exceeding six years. In such a case, the customer shall have the responsibility of providing the evidence of the date of installation of the dummy meter, if a period of less than six years is to be applied in the circumstances,” said the OUR in its determination notice dated May 2012 but released last week.

“Where an account has been overbilled or subject to excess charges, because of an error or omission by JPS, or a condition of the meter or service installation infrastructure, JPS shall adjust or back-bill, as appropriate, the account for a period not exceeding six years or for the exact period for the overbilling occurred, whichever is less.”

business@gleanerjm.com

http://jamaica-gleaner.com/gleaner/20120610/business/business1.html

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