EDITORIAL - Paulwell, Mas and the energy crisis

Published: Monday | February 11, 2013 Comments 0

As you read this, Phillip Paulwell, Jamaica's energy minister, is likely playing Mas in Trinidad at its annual carnival. Jamaicans may be minded to say that he is playing something else.

People here are also likely to conclude that the energy minister's sojourn to Trinidad, and whatever he may be getting up to in Port-of-Spain, San Fernando, Arima, Diego Martin, or wherever, also says something about Mr Paulwell's sense for priorities. That is a matter on which we would like to hear the view of Prime Minister Portia Simpson Miller.

First, though, we must make clear that this newspaper does not begrudge Mr Paulwell, or anyone else, his right to annual holidays. Nor would we normally care should any Jamaican decide to jet off to Port-of-Spain to join a carnival band, swig rum and dance up a storm at the Savannah. Which, of course, is not a claim we make of Mr Paulwell, not withstanding our unease at his absence from Jamaica at this time.

Here is the context. Jamaica faces not merely a crisis, but an energy emergency. Our sense, though, is that no one in the Government, including the portfolio minister, seems to grasp either the depth or the immediacy of the problem - at least not sufficiently for it to impinge on the bacchanal.

In Trinidad and Tobago, where the music of 'Despas', Destra, Machel and others may be echoing in Mr Paulwell's head, firms pay around US$0.05 per kilowatt-hour for electricity. The Trinidadians have oil and gas and enjoy government subsidies on their power bill.

In energy-deficient Jamaica, we pay upwards of US$0.41 per kilowatt-hour for electricity, which is a significant input in production and a high price which helps to make Jamaican firms uncompetitive. Indeed, over the past decade and a half, several plants that built things in Jamaica have migrated in favour of Trinidad, with which we run a trade deficit of nearly US$1 billion.

ENERGY WAFFLE

For more than a decade, Jamaican administrations have waffled and procrastinated over an energy policy to deliver cheaper electricity prices. Recently, under Mr Paulwell's watch, there has been the final slow-motion collapse of a project that was to make liquefied natural gas (LNG) as the fuel of choice and to deliver electricity at between a 33 and 40 per cent below current prices.

Last week, for instance, the Office of Utilities Regulation (OUR) rescinded the Jamaica Public Service Company's (JPS) position as the preferred bidder on a 360-megawatt, gas-fired power plant because the light and power company missed deadlines to demonstrate that it could meet the benchmark price. The problem is that JPS, having assumed the effort to source the fuel after the Government backed out, has been unable to find LNG cheap enough for the project to make sense at the target price.

Minister Paulwell claimed to have been blindsided by the OUR actions, suggesting that he was in favour of giving JPS additional time, without the continued financial burden of a performance bond, to rescue the deal. The upshot has been a state of confusion, in the Government and elsewhere, over energy. The situation is in need of a steady and steadying hand.

In the midst of this situation, Mr Paulwell chose carnival - the kind of stuff that would make Les Green's day.

The opinions on this page, except for the above, do not necessarily reflect the views of The Gleaner. To respond to a Gleaner editorial, email us: editor@gleanerjm.com or fax: 922-6223. Responses should be no longer than 400 words. Not all responses will be published.

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