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Paulwell questions whether JPS customers reaping from LNG investment

Published:Friday | November 12, 2021 | 12:11 AM
Former Energy Minister Phillip Paulwell.
Former Energy Minister Phillip Paulwell.

Former Energy Minister Phillip Paulwell says the role of the Office of Utilities Regulation (OUR) is being called into question as customers of the Jamaica Public Service Company (JPS) are still waiting to benefit in a meaningful way from lower costs associated with the establishment of liquefied natural gas (LNG) plants in Bogue, St James, and Old Harbour in St Catherine.

Commenting on the New Fortress plants, which supply LNG to the JPS, Paulwell argued that the facilities were established to enable lower fuel costs to trickle down to the Jamaican consumer.

“It was contemplated that in the medium to long term, the Jamaican consumers would benefit from all of those inputs, and because the price of electricity today is still so high, it becomes a major preoccupation that with the advent of LNG, we are not seeing a corresponding reduction in the price of electricity,” Paulwell said during a meeting of the Joint Select Committee reviewing the Electricity Act 2015.

Paulwell, who is a member of the parliamentary committee, said that when negotiations were held with both the JPS and New Fortress, it was clear that the upfront cost for the establishment of the LNG plants would be borne by the customers of the JPS.

He said that at the time of the negotiations, it was understood that every other customer of New Fortress would contribute to the cost of the infrastructure that the JPS customers had funded.

The former energy minister argued that since that time, all other end users were benefiting from the infrastructure.

He asked members of the OUR if the new end users who came on the infrastructure after it was established were paying their share for the establishment of the facility.

Power system consultant at the OUR, Valentine Fagan, pointed out that the gas that was now being supplied to other commercial users was imported through the Bogue terminal and not through the plant in Old Harbour.

However, Paulwell said that whether the fuel was supplied through the Bogue or Old Harbour plants, the fact that the Jamaican consumer had to pay for those establishments, the same principle ought to apply for the new end users.

“Those other end users must contribute to the cost of that infrastructure which will enable a lowering of price for the Jamaican consumer,” he said.

Paulwell also quizzed the OUR on whether New Fortress Energy had an arrangement to process gas locally and export it to other countries.

Fagan said he could not confirm the information presented.

“In your role as the principal regulator, that is a fundamental issue,” said Paulwell.