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Paulwell just thinking aloud with monopoly stance - JPS head

Published:Friday | February 17, 2012 | 12:00 AM

Arthur Hall, Senior Staff Reporter

Energy Minister Phillip Paulwell's often repeated vow to break up the Jamaica Public Service Company's (JPS) monopoly on the transmission and distribution of electricity has failed to impress officials of the company.

"As it relates to the thought of introducing competition (in transmission and distribution), I believe it is just a thought that the minister is thinking aloud," Dan Theoc, chief financial officer of the JPS, declared yesterday

"The beauty about this is that's not the minister's decision. We have a clear regulatory framework. The JPS has a licence which was extended in August 2011 by the Government of Jamaica regardless of who the minister is," added Theoc.

Addressing issues

He noted that officials of the JPS are scheduled to attend an energy forum with Paulwell and other players in the industry where the issues can be properly addressed.

According to Theoc, the forum will allow the opportunity for clear discussions based on economic analysis and not just pronouncements.

"We are open to having discussions with the Government of Jamaica about what improvements can be made for the people of Jamaica," said Theoc

Paulwell, even while in opposition, has argued that allowing competition in the transmission and distribution of power would lead to lower electricity prices for Jamaicans and has vowed to make the shift in the short term.

Since being appointed energy minister early this year, Paulwell has promised to reduce the price of electricity to between US$0.15 and US$0.18 per megawatt-hour, from the current approximately US$0.40, a fall of between 55 per cent and 62 per cent.

According to Paulwell, this can be achieved by a combination of measures, including the breaking up of the JPS monopoly on the transmission and distribution of electricity and the introduction of LNG and coal

Only 20 per cent of cost

But Theoc and other JPS officials told journalists during a media briefing yesterday that the transmission and distribution of electricity makes up only 20 per cent of the cost.

He said any meaningful reduction in what Jamaicans pay for electricity would come with the introduction of a cheaper energy source as the main component.

"Every year the JPS is reducing the cost of energy through the existing regulatory framework ... in real terms, the cost of energy reduce by 2.7 per cent for the non-fuel cost which I have control over," said Theoc.

He told journalists that the Government should decide on a mix of alternative energy sources, including natural gas and coal.

The JPS executive noted that the company has already received regulatory approval for the introduction of a 360-megawatt liquefied natural gas plant and when that comes on stream in 2014, Jamaicans should see a reduction in their electricity bills of between 30 and 40 per cent.