EDITORIAL - End the Tom and Jerry business, Mr Paulwell

Phillip Paulwell could hardly resent that people increasingly believe that he is not playing straight on energy. For, he has given them cause to be sceptical. Or, perhaps, more to the point, there is a sense of deliberate obfuscation on the part of the energy minister.

It is time for Mr Paulwell to speak with clarity and frankness about where we are on the energy programme, than have the Government engage in an endless round of insidious kite-flying that substitutes for policy articulation and communication.

As anyone who has given serious thought to Jamaica's economy has long concluded, outside of solving the debt crisis, cheaper energy has the greatest potential for being a game-changer for the island's laggardly economy.

At upwards of US$0.41 per kilowatt-hour, Jamaica has among the highest electricity rates in the Caribbean, a fact that feeds deeply into production costs and undermines the competitiveness of the island's economy.

Ideally, most analysts will say, the cost of energy should be more than halved for the economy to have a real shot at global competitiveness, although they would take a bit less than that if there is a clear and realistic path towards that goal in the medium term.

STRIKING A BALANCE

There is also consensus that the two most important variables to reducing the cost of electricity are, in this order, the mix of fuels used for the extraction of the energy, and the efficiency of the power plants that convert the energy to electricity.

After a long haggle, across administrations, the Jamaican Government settled on liquefied natural gas (LNG) as the primary fuel that would best deliver on its energy objectives.

The Jamaica Public Service Company (JPS), which controls near 70 per cent of the country's generating capacity and has a monopoly for the retailing of electricity, won a bid for a 480-megawatt plant that would primarily burn natural gas.

The Government separately invited bids for the delivery of LNG and for the establishment of a floating regasification facility.

Then, several weeks ago, Mr Paulwell announced that the tenders for the delivery of LNG were not sufficiently economic to make the government-sponsored project feasible and that the State would withdraw from the scheme, leaving it up to the private sector.

Other fuel options would also be on the table.

But at the same time, the minister said that JPS would not only proceed with the LNG power plant, but would pursue the project for the LNG infrastructure and delivery of natural gas.

MORE SUBSTANCE NEEDED

From Mr Paulwell's tone, the JPS deal was bankable, although he did not have in hand a written undertaking.

Our concern is that in the several weeks since the minister's parliamentary pronouncement, there has been no substantive addition to the skeletal arguments he paraded - neither by himself nor JPS. Is JPS's offer really bankable? What will be the scope of the project? Will there be other off-takers for natural gas?

In the meantime, the Office of Utilities Regulation has put out a request for proposal for 115 megawatts of generating capacity based on renewables, at tariffs, depending on the fuel used, ranging from 11.3 US cents to 26.73 US cents per kilowatt-hour.

Concurrently, the minister's ghostly proxies are putting it about that he is coming soon with a cheaper fuel than LNG.

Energy is too important a matter for cat-and-mouse games, Mr Paulwell.

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