Gov’t gets ready for talks with JPS about electricity licence

The Government is now in discussions with the World Bank as it looks ahead to talks with the Jamaica Public Service (JPS) about its 10-year electricity licence, which expires in another six years.

Under the conditions of the licence, the notice period begins five years before expiration.

Head of energy in the Ministry of Science, Energy and Technology (MSET) Fitzroy Vidal told the first meeting of the joint select committee which is reviewing the Electricity Act of 2015 that preparations are being made for consultations leading up to negotiations.

Opposition spokesman on industry, competitiveness, and global logistics Anthony Hylton called for some indication of Government’s plans regarding the light and power monopoly.

“If you have to give notice in 2022, some consideration must be given at or around now, otherwise, come 2022, you will not be able to signal what the approach is likely to be, and that will have legal implications at huge costs to the consumer and a disfiguring of the system,” he cautioned.

Concerns were again raised that if the price of electricity continues to escalate this could drive more people off the grid and leave those who remain saddled with even higher bills.

“When people leave the grid it is those who remain on the grid who take up those investment payments, those fixed demand payments and more and more people are going to be leaving the grid as they realise that it is cheaper to do so, and those who remain will be saddled for 20 years with these payments,” Opposition spokesman on energy Phillip Paulwell warned.

He said new power purchase agreements (PPAS) should be granted with caution, as when large companies exit the grid the Government’s 20 per cent stake in the JPS is diminished.

He further suggested that customers who opt off the grid need not be restricted to only the amount of power that they need, but that they could be allowed to acquire additional capacity that can then be deployed elsewhere on the grid.

“The issue at stake is the price. The price must make sense, because if the price of electricity doesn’t go down appreciably in a matter of months, you’re going to continue to see people leaving the grid, and at that time you’re going to have a crisis because you’re going to have these people with PPAS that nobody can pay for,” he stressed.

Vidal agreed that the concern was a valid one and that the dilemma brings into question the period of PPAS and their terms and conditions.

At the same time, he said at the centre of the issue is the efficiency of the grid, which remains a major problem. “The broader discussion is how do we make the grid what it was intended to be — the cheapest source, the bulk distributor, but it is not. That’s largely because those who are able to are exiting the grid,” he explained.

However, Vidal argued whether more people opt for other sources of energy, the grid is still critical to energy security. “It seems to me that all the people who want to come off the grid still need the grid. That’s how the technology for solar works, you need incoming voltage from some other source to operate; net billers, power wielders, auxiliary connectors all need the grid. Therefore, we have to find a way to make sure that policy is developed as legislation is put in force that we make a decision to support the health and integrity of the grid, because everybody requires the grid to operate,” he said.

Vidal pointed out, too, that the demand for electricity has not grown in many years, remaining at just over 600 megawatts. The Government believes there are solutions to bumping up demand, such as the introduction of electric-powered vehicles.