Not dissing the minister
THE EDITOR, Sir:
PLEASE ALLOW me to put in context media reports on my response to the minister of energy's proposal to initiate discussions regarding breaking up the Jamaica Public Service's (JPS) monopoly on the transmission and distribution of electricity.
Contrary to suggestions in the media, there was absolutely no intention on my part to disrespect our minister, Phillip Paulwell, when I indicated that the existing regulatory framework does not currently allow for the implementation of this proposal.
It is unfortunate that the discussions have diverted attention away from the real issue, which is how to reduce the high cost of electricity in Jamaica. JPS is as anxious as anyone else to see electricity costs reduced, as lower costs will translate to a stronger economy, and JPS will only grow as the nation grows.
Ready for energy talks
In responding to the questions of reporters at a press conference hosted by JPS last week, I made it clear that we are willing and ready to engage in discussions with the newly formed National Energy Council, which is chaired by the honourable minister, on the best way forward for the people of Jamaica.
While recognising the regulatory framework in which we operate, we understand the widespread desire for competition. A monopoly is never a popular option. However, in most countries around the world, governments and regulators have opted for the regulated monopoly model, as we have here in Jamaica. This model is meant to protect the interests of consumers, by having rates and service standards set by an independent regulator.
Last week's press conference was to update the media on our financial performance and plans to reduce energy costs. As we outlined, JPS is focusing our immediate attention on the generation side of the business, which accounts for 80 per cent of the cost of electricity. This is primarily because of Jamaica's over-dependence on oil as the main fuel source for electricity generation.
JPS does not have a monopoly on the generation side of the business. We are not allowed to add new generation without participating in a competitive tender process. It is the Government that decides on the type of fuel to be used in electricity generation. The Government has signaled its intention to proceed with LNG as a fuel option at this point, and it is in this context that JPS and its shareholders are pursuing the construction of a 360 MW LNG-fired power plant, with the full confidence that this will result in a reduction of over 30 per cent in electricity costs by the end of 2014.
In the meantime, we look forward to having dialogue with the minister and the National Energy Council on the regulatory framework that will be in the best interest of all stakeholders.
Chief Financial Officer, JPS