Tomblin wants JPS to transform into gas and electric company
Kelly Tomblin, CEO of Jamaica Public Service Company Limited (JPS), said Wednesday that the company is weighing whether to invest in a gas terminal project mooted as a hub to supply the wider Caribbean.
The terminal may cost between US$200 million and US$300 million to develop the infrastructure for internal and external supply, says Tomblin who notes that the company's participation is up to the shareholders.
The terminal would be developed at Old Harbour, where JPS is in the process of selecting a bidder to develop a 190-megawatt power plant. It will replace two old plants with capacity of 292MW located at Old Harbour and Hunts Bay.
The new plant will supply power to the grid at 12.89 US cents per kilowatt-hour.
Tomblin said the Old Harbour plant and gas terminal hub would require total investment of about US$500 million, but would be separate projects.
JPS is spearheading the power plant, but the gas terminal, which was first disclosed by the Electricity Sector Enterprise Team, would be a project of the Jamaican Government.
"The gas terminal is not JPS's - we will be a customer. I would love to be a part of the terminal but that would be up to our shareholders," said the JPS head. "As a major customer, I would like us to have a position in it ... we are discussing that with the board."
Her own vision, she said, is for JPS - which is in the business of generating and distributing electricity - to transform into a gas and electric utility.
"I can see it - JPS Gas and Electric. We just have to think bigger."
Last Tuesday, at the same time that ESET Chairman Dr Vincent Lawrence was disclosing that JPS had received 12 expressions of interest from potential developers of the 190MW plant in Old Harbour, St Catherine, he also announced that the site was under consideration as a supply hub for natural gas to the Caribbean.
Tomblin, who spoke in an interview with the Financial Gleaner, said that the confluence of geopolitical factors and new technology were making the use of gas and the hub possible for the first time.
"You have seen [US Vice-President Joe] Biden signing the energy agreement, you have seen Obama here, the DOE signing an agreement - the geopolitics now has the US able to bring gas to Jamaica. That's a game changer because as a non-free trade agreement country, before this gas could not come directly to Jamaica, now it can," said Tomblin
"We have also seen a lot of support from the US government about making sure that this happens. That's really changing things and it helps our financing."
Technology changes also allow for the transport of smaller volumes of gas, she added.
Discussions about such a hub flowed from a study done by Inter-American Development Bank on the regional demand for natural gas and the economics around consistent supply. The issue was raised by head of the US Department of Energy, Secretary Ernest Moniz, in energy talks in Kingston during President Obama's official visit.
Tomblin said that while the shareholders of JPS felt "bruised and battered" over conditions in the last three years - which included the payment of no dividends, and a rate decrease imposed by the utilities regulator - they were now more optimistic about the electricity market under the plans corralled by ESET.
"A rate decrease is unheard of," Tomblin declared. "I think we would be more excited if we weren't fighting for our lives every day," she added, while noting that JPS loses "US$2 million a month" to theft.
The new terminal operation, she said, will require some risk taking.
"Someone will have to take a risk to build a terminal bigger than we need for Jamaica. It takes a kind of investor who takes their own decisions without bureaucracy. That's what you will need for a hub - just some vision and some risk taking."