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Paulwell sets up energy council

Published:Sunday | February 12, 2012 | 12:00 AM
Minister of Mining and Energy Phillip Paulwell with Dr Ahmad Zia Mian, director general of the Office of Utilities Regulation, at the AmCham Private Sector Energy Forum, held at Knutsford Court Hotel, New Kingston, last Thursday. - Ricardo Makyn/Staff Photographer
Gregory Mair to be deputy chair of new energy council.

Job 1: To cut the cost of electricity

Steven Jackson, Business Reporter

Minister Phillip Paulwell has announced plans to set up a bipartisan energy council tasked with achieving up to 62 per cent reduction in energy costs paid by households and businesses.

Paulwell, whose Cabinet portfolio covers energy, science, technology, and ICT, also said that he would work towards liberalising the energy sector, a move that would end the Jamaica Public Service (JPS) Company's monopoly on power distribution.

The minister said he expects to set up the council this week as a clearing house for the implementation of politicised or controversial energy measures.

Its members will include representatives of the American Chamber of Commerce of Jamaica, the Jamaica Chamber of Commerce, the Private Sector Organisation of Jamaica, the Jamaica Manufacturers' Association, the Small Business Association of Jamaica, and renewable energy experts.

"We spoke about trying to take this energy conundrum outside the realm of competitive politics. Energy is too important to have a political divide," said Paulwell while addressing AmCham's 'Private Sector Forum on Energy' on Thursday in New Kingston.

Paulwell will chair the council and Opposition Spokesman on Energy, Gregory Mair, will be its deputy chairman.

"The council will take all the talk, all the papers over the years, and policies left on paper, and have them implemented once and for all. We have to get it right. We have wasted decades," Paulwell told energy experts and managers.

"We have not seen the improvement in the JPS largely because the Government failed to make appropriate and timely decisions. We have not seen the right fuel sources, and we intend to change all of that now. It is through this council that we will get the bureaucracy to work."

The island's energy costs currently rank among the region's most expensive due to its reliance on costly oil hovering at US$100 a barrel. Jamaica imported some US$1.48 billion worth of oil between January and July 2011, according to Bank of Jamaica data.

The new Simpson Miller administration is open to Jamaica's power plants burning coal and petcoke which, Paulwell says, could slash the price of electricity over three years by 55 per cent to 62 per cent.

The JPS holds a monopoly on the distribution of electricity to customers. On Thursday, Paulwell said he would would attempt to break that monopoly. He already has a track record as the minister who, at the start of the last decade ended 
the monopoly held by Cable & Wireless Jamaica over telephone service.

"The people of Jamaica gave my party a mandate which included the full liberalisation of the energy sector to ensure that we have full interconnection with the grid," he said, adding that JPS would benefit from liberalisation as it would encourage greater investment and energy demand.

"I will create for JPS a win-win scenario because ... so many persons are fed up with the high cost of electricity."

A coal plant costs roughly three times that of an LNG plant to develop, but the price of coal is far cheaper than LNG.

Oil fuels the bulk of Jamaica's 884 megawatts of capacity. LNG and coal offer a cheaper fuel source for integration into new power plants, but these options have remained mostly stalled since the 1990s in part due to political indecision.

JPS will build Jamaica's first LNG-fired plant at a cost of J$52 billion in St Catherine. The plant will operate on diesel as backup fuel.

The company has previously said that its upgraded plant at Bogue in Montego Bay is already configured for LNG conversion.