Efficient Electricity Generation Among Issues Private Sector Wants Addressed in Licence Negotiations

The local business lobby is calling on the government to ensure certain steps are taken during negotiations for a new electricity licence.

The call is being made by the Private Sector Organisation of Jamaica, PSOJ, the Jamaica Chamber of Commerce, JCC, and the Jamaica Manufacturers and Exporters Association, JMEA.

The groups are reacting to news that the government will not be renewing its licence with the Jamaica Public Service Company, JPS, under the current terms.

Mahiri Stewart has that story.

The PSOJ, the JCC and the JMEA are praising the government for its transparency and decisive action in its decision to formally advise the Jamaica Public Service Company, JPS, of its intent not to renew its licence.

Energy minister, Daryl Vaz, announcement the decision at a media briefing on Tuesday morning.

He cited high light bills and lack of opportunities for renewable energy as two of the key factors that influenced the government’s decision not to renew the licence.

The business lobby groups are welcoming Minister Vaz’s recognition that Jamaica’s electricity sector is in urgent need of reform.

They say as the country moves towards reform in this area, hard truths must be confronted.

Among these is the fact that Jamaica loses 28 per cent of the electricity it generates, which is far higher than the region average of 15 per cent.

The PSOJ, the JCC and the JMEA note that this high loss rate causes light costs to rise while deterring investment and undermining confidence.

According to them, Jamaica’s electricity rate is among the highest in the Caribbean at around US 28 cents to 30 cents per kilowatt hour when compared to countries like the Dominican Republic and Trinidad and Tobago, which have rates at around US 12 cents to 15 cents.

As a result, the business lobby groups want the government’s approach to electricity reform to be anchored in certain pillars.

The first of which, they say, is fuel mix and diversification. They want to see an integration of renewables and cleaner fuels into the national grid.

The PSOJ, the JCC and the JMEA want the policy ambitions to translate into real-world improvements.

As such, they are recommending measures such as updated time-of-use tariffs, expanded wheeling arrangements and streamlined approvals for renewable projects.

The groups also want to see concessional loan facilities in the 4 to 6 per cent interest range backed by guarantees to de-risk lending for financial institutions.

Other recommendations include modernising the local grid to reduce technical losses, aggressive action against electricity theft and greater data transparency from the Office of the Utilities Regulation to support evidence-based policymaking.

The PSOJ, the JCC and the JMEA also want the government to align with the national energy goals, which include achieving 50 per cent renewable energy by 2030 and reducing the electricity rates to US 12 cents per kilowatt hour.