JPS shrugs off OUR shocker, given green light to build power plant
Despite recent hurdles, the Kelly Tomblin-led Jamaica Public Service (JPS) is indicating that it is determined to increase its contribution to the burdened national grid and help stave off threats of power outages in the years ahead.
The light and power company has shrugged off the shock of the Office of Utilities Regulation's (OUR) disapproval of its request for a rate hike and is moving ahead with plans to erect a 190-megawatt (MW) power plant.
Shedding light on the work of the Electricity Sector Enterprise Team (ESET), chairman Dr Vincent Lawrence told journalists yesterday that his group has its eyes firmly set on the addition of 380MW to the national grid by 2017.
Addressing a press conference at the Office of the Prime Minister, Lawrence revealed that Cabinet on Monday approved the construction of the 190MW power plant along with two others to increase generating capacity to the island by 380MW.
"The JPS has exercised its right of first refusal to replace obsolete generating capacity by the construction and installation of a 190MW gas-fired, co-generation power plant at Old Harbour," said Lawrence.
He said the JPS had agreed to a power tariff of not more than US12.89 cents to facilitate the construction.
"ESET has recommended and Cabinet has given approval for a letter to the JPS authorising the development of 190MW of generating capacity and the construction of a terminal in Old Harbour," said Lawrence.
He disclosed that Cabinet also approved the construction of a 140MW gas-fired, co-generation plant by Alpart Venture and another 50MW for Jamalco Venture.
Presenting an update to journalists during a press conference after the submissions were made to Cabinet yesterday, Lawrence said the JPS would also be forging ahead with the upgrading of its Bogue plant, which generates 50MW, which is not factored into the added generating capacity.
For Bogue, Lawrence said the proposal is to convert the feed stock to gas, making the retrofitted power plant a 115MW gas turbine co-generation power plant.
Lawrence pointed out that the JPS requires capital expenditure of US$15 million for the conversion of the Bogue power plant to be completed by the end of 2015.
He disclosed that ESET had been forced to delay its due diligence on the Jamalco project because the new majority partner, the Noble Group, is finalising its own analysis of the project in order to decide whether it will be making amendments.
Lawrence said Cabinet also agreed with ESET to subject the existing co-generation proposal on the 50MW of coal-fired generation at Jamalco to further analysis before it provides more definite recommendations on the project.
The new principals of Jamalco have promised that their position will be forthcoming by the end of the month.
Lawrence said ESET has continued with a number of stakeholder consultation meetings and discussions with key players in the electricity market.
These comprise the JPS; the OUR; the bauxite alumina sector (Jamalco and Alpart); the Ministry of Science, Technology, Energy, and Mining; the Inter-American Development Bank; and Independent Power Producers (IPPS).
Lawrence said ESET continued to receive assistance from the World Bank, which has provided expertise in analysing technical and financial submissions from JPS, Alpart, and Jamalco, which are planning to build, own, and operate the proposed power plants.
He said ESET had also conducted assessments of the gas market, including trends, costs, shipping size, among other variables, and has conducted comparative studies of electricity policy and framework across the region.
Among other recommendations approved by Cabinet are the review of the Amended and Restated All-Island Electricity Licence (2014), with the goal of
facilitating viability, reliability, and investment in the electricity sector.