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Act now on energy - Private sector gives gov't ultimatum to outline policy, OUR apologises to Paulwell

Published:Thursday | February 7, 2013 | 12:00 AM
Brian Pengelley
Kelly Tomblin
Phillip Paulwell

THREE OF the country's leading private-sector groups have given Energy Minister Phillip Paulwell and the Office of Utilities Regulation (OUR) 30 days to lay out a clear road map to secure massive reductions in electricity rates.

The Government was banking on the introduction of liquefied natural gas (LNG) to reduce the cost of electricity by up to 40 per cent. However, the fate of the LNG project hangs in the balance following the withdrawal of the Government from the process.

Paulwell told the House of Representatives last October that he has "a firm assurance from the JPS (Jamaica Public Service Company) that they will undertake this LNG project within the timelines established".

He said the Government was tackling the matter of the nation's energy crisis and specifically the high price of electricity head-on.

At the time, Paulwell said the Jamaica Public Service Company (JPS) was obligated to bring into service by 2015 a new 360-megawatt gas-fired combined-cycle generation plant, providing new capacity to replace approximately 292 megawatts of aged plants.


But the spanner has been tossed into the wheels of that project following the decision by the OUR to terminate the project.

JPS President and CEO Kelly Tomblin has said the termination of the process means JPS customers would have to wait longer to see a real reduction in electricity charges.

Yesterday, Brian Pengelley, president of the Jamaica Manu-facturers' Association (JMA), told The Gleaner that the latest development was cause for concern.

"I don't think that LNG project is alive without that plant happening, and my take on it is that we are basically back at square one," Pengelley said.

Yesterday, the Private Sector Organisation of Jamaica, the Jamaica Chamber of Commerce and the JMA called for the Government to communicate a definite direction in reducing Jamaica's energy cost by 2015.

It noted that the Government was elected by Jamaicans to make tough decisions and charged that "they need to act swiftly as the constant delays are costing the country".

Said the groups: "Jamaicans are overburdened by high electricity costs, which are not only hurting their pockets but thrusting them further into poverty and the time has come for a clear course of action with hard timelines to be disclosed to the country."

The energy minister could not be reached for comment, but yesterday, the OUR apologised to Paulwell for not informing him at the same time it informed the JPS of its decision to terminate the 360-megawatt energy process.

"We should have advised you of this at the same time but, regrettably, this was not done and we offer our sincerest apologies for this oversight," the OUR said in a letter to Paulwell yesterday which was signed by Maurice Charvis, a deputy director general.

The OUR also hinted that it could reverse the decision first told to The Gleaner by Ahmad Zia Mian, who leaves as director general effective tomorrow.

While outlining the issues which caused it to put the brakes on the planned multibillion-dollar energy plant, the OUR said the absence of information from the JPS in support of another extension and the failure of the company to comply with the procurement rules left it with no choice but to formally terminate the process.

However, with the decision likely to delay any substantial reduction in electricity rates, the OUR hinted that there might be a way out which could see the planned JPS project back on track.

According to the OUR, it has already advised the JPS that it would consider its latest proposal, even though it was submitted one day after the final deadline and without the necessary renewal of the bid security.

"[The OUR is] mindful of the fact that we have already lost some two years in this process and that there may be a need to give considerations to all available options in securing new capacity at reduced price and in a timely manner … ," said Charvis.

"The OUR is cognisant that this most recent development in the 360MW procurement process represents a major shift in the situation in respect to the electricity sector and might require review or change of existing policy which requires a competitive procurement or permitting process."

The regulator also indicated that it was ready to engage in any discussion and to provide any information or advice necessary to guide the deliberation.