JPS deal was badly negotiated - Paulwell

THE TECHNOCRATS who negotiated the rate at which the Jamaica Public Service (JPS) pays the Wigton Windfarm for power it generates are being blamed for a striking a bad deal.

Phillip Paulwell, the Opposition spokesman on energy, said on Wednesday that the US5.0 cents per kWh negotiated on behalf of the wind farm was at the lowest range that could be obtained at the time.

"The problem was a badly negotiated deal with JPS, which saw a price of US5.5 cents per kWh when the average was US10 cents per kWh. I believe that those who were involved in those negotiations failed us," Paulwell said.

The wind farm, located in Manchester, sells electricity to the JPS.

William Saunders, the head of Wigton Windfarm, has said that the rates paid by the JPS had pushed the entity to the brink of collapse.

"The financial situation was so bad that although Wigton was up for divestment in early 2007, the sale was cancelled in November of that year as GOJ (Government of Jamaica) did not receive a single offer to purchase the company," he wrote in an article published in The Gleaner three months ago.

He said Wigton was desperate to have the purchase rates adjusted and in October 2009, after sustaining more than $127 million in losses, it applied to the Office of Utilities Regulation for an increase in rates in accordance with the (OUR) Act.

Saunders also said that after months of negotiations with the JPS, both parties agreed to adjust the rate to US8.0 cents per kWh to be effective on July 1, 2009.

"This rate adjustment, however, was subject to approval by the OUR. However, approval was never given, as the OUR argued that such an adjustment could not be made, despite agreement between both parties, as this would set a precedent for all IPPs," Saunders wrote.