Gov't weighs JPS licence tweak for special economic zones
Published:Friday | April 25, 2014 | 12:00 AM
Avia Collinder, Business Reporter
The Office of Utilities Regulation (OUR) has provided advice to the Ministry of Industry, Investment and Commerce on the possibility of the special economic zones being allowed to produce their own energy.
Beyond that, the regulator said it was unaware how far the discussions had reached and what concessions the ministry was considering for investors in the Caymanas Economic Zone (CEZ) and other special economic zones (SEZ) to be created.
The issue appears to be centred on whether investors in the zones could, under the current legislation, be allowed to operate independently of the national grid and its manager, Jamaica Public Service Company (JPS).
Industry Ministry Anthony Hylton previously disclosed to lawmakers that investors were keen to create their own energy for projects falling under the logistics hub programme, which he leads, but that it had implications for the current arrangement under which JPS has exclusive distribution rights for power.
JPS is appealing a Supreme Court ruling that says its licence as configured does not give it exclusive right to distribute electricity.
If upheld, the ruling will end JPS' monopoly over electricity supplies.
MARKET OPENED UP
Other developments in the electricity sector in recent years have opened up the market to allow companies and individuals to produce and supply energy but through netbilling and IPP arrangements with JPS. The framework and fees for power wheeling via the grid is also under development.
A total of 16 SEZs are under consideration, with the industry ministry currently in the process of developing a policy around which legislation will be crafted.
The first is expected to be developed on 1,000 acres on the Caymanas Estate in St Catherine set aside for the CEZ. The industry ministry is in the process of developing either joint-venture or public-private investment partnerships to bring the zone into operation.
Infrastructure intended for the Caymanas project, as outlined by JAMPRO, includes construction of an electrical power transmission and distribution system. But prospective investors appear to have no desire to interact with national grid manager, JPS, with Hylton saying that they have no intention of paying US$0.42 per kWh at any point.
That's the current rate at which electricity reaches the end user via the national grid.
"The OUR is aware of discussions between the parties since last year and has provided advice where requested for changes in the legislative framework," said OUR Director of Regulation, Policy, Monitoring and Enforcement Ansord Hewitt.
ADVICE CONFIDENTIAL
"We do not know the current status of the discussions … . You would appreciate, however, that any advice the OUR provides to the Government at this point is confidential," he said.
Requests for comment to JPS are still unanswered.
"The Government has not shared its thinking with the OUR at this point as to what is contemplated in this regard. We would therefore have to await such specifics to see how it fits into the existing regulatory framework, which we are obliged to uphold," said Hewitt.
"Bear in mind that the JPS licence is an agreement between the GOJ and the JPS, so the parties can mutually agree to modify the arrangement," he told the Financial Gleaner.
To date, individual companies have been permitted varied private power-supply arrangements with pending changes related to power wheeling offering them the promise of even more savings and independence, as this will allow them to transmit power from one location to another along JPS's network.