Producers of renewable energy facilities can now cumulatively sell about 12 megawatts of excess power generated from wind and solar power to the Jamaica Public Service Company (JPS), an amount which translates to about two per cent of the island's peak demand.
It is a long-awaited move, referred to as net metering, that will result in consumers saving on electricity bills, but providers must obtain licences to sell the excess power.
The Office of Utilities Regulation (OUR), in a directive dated September 30, made the electricity policy of net metering official.
Producers can now apply to the OUR for a five-year licence to participate in net metering, provided they generate power from solar or wind.
"The OUR has completed and made available a standard offer contract (SOC) for the purchase of as-available energy from intermittent renewable energy facilities up to 100kWh," said the utilities regulator, in a release which later specified that small consumers can generally sell up to 10 kilowatt hour of power and commercial customers up to 100 kilowatt hour.
Buy at lower price
The JPS will purchase the power at a lower price than it sells, according to a formula set out in the determination document.
"The compensation for the energy exchanged between JPS and the customer under the SOC is determined via a net billing arrangement whereby the customer will pay the prevailing retail price for energy consumed from the national grid as is applicable to the customer's rate and class," said the OUR's document.
The OUR noted that the standard offer contract arrangement would initially run as a "pilot" for two years while capping the "aggregate capacity of two per cent of JPS's highest demand peak". JPS's peak demand hit 683 megawatts in 2010, according to the company's latest annual report.
"An assessment of the impact on the JPS network will be done at the end of the period with a view to removing or expanding the cap as is deemed appropriate by the OUR," the regulator said in the official document.
The process of finalising the standard order contract for implementation began in May 2009 when the OUR initiated a consultation process with the JPS, according to the determination on the offer.
The OUR deemed it necessary to first have an extensive consultation with the JPS to ensure that the initial draft of the contract adequately reflected components of the regulatory framework and legislation governing the sector, and took into account relevant commercial and technical matters.
After several meetings, exchange of correspondence and deliberations, a draft contract, titled 'Jamaica Public Service Company Limited Standard Offer Contract for the Purchase of As-Available Energy from Intermittent Renewable Energy Facilities up to 100kW', was prepared for submission to the public for comments, the document said.
The draft contract was made public on March 16, 2011 for consultation and comments. Meetings were held in Montego Bay, St James; Mandeville, Manchester; and Kingston.