Energy Minister Daryl Vaz
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Energy Minister Daryl Vaz, Finance Minister Fayval Williams and Opposition Spokesperson on Energy and Climate Change, Phillip Paulwell
The government says it will not renew the Jamaica Public Service Company (JPS) All-Island Electricity Licence when it expires on July 8, 2027.
Energy Minister Daryl Vaz made the announcement on Tuesday, confirming that new licensing terms will be negotiated for the supply of electricity across the island.
Mr. Vaz said the JPS has been formally notified of the government's intention, which has been done as stipulated two years ahead of the expiration date.
He stressed that it is not the intention of the government to take charge of the operations of the JPS, but to secure a new framework which better serves the people of Jamaica.
"The development where the government of Jamaica has essentially formally notified the JPS of its intention to, at the expiration of the current licence, not pursue renewal under existing terms, has come in the context of developments in the wider electricity sector where there has been a significant global reduction in the cost of renewables. The government of Jamaica is determined that consumers of electricity in Jamaica should be placed in the best position to benefit from these developments. The current licensing arrangements with the JPS [do] not provide sufficient incentives to bring renewables into the grid at a scale," noted the minister.
Mr. Vaz said the government is open to exploring expressions of interest from all parties which may be desirous of acquiring the new licence, including the JPS.
He reiterated that despite the introduction of renewable energy, Jamaicans are still not seeing any significant reduction in electricity prices.
Asserting that the current arrangements are deeply flawed and in need of significant reform, the minister said the government is aiming to secure a new framework which better serves the people of Jamaica.
"Whoever it is that we end up going to the table with for a final negotiation for a new licence with new terms, as of July 2027, will be terms that are favourable to everybody, because we are getting the opportunity to draw a line in the sand, learn from our mistakes and don't repeat them."
Finance Minister Fayval Williams, who also spoke at the press conference, noted how the existing terms of the licence have hindered Jamaica's ability to remain competitive on the global stage.
"It is no secret that our manufacturing sector cannot expect to accelerate its growth unless it has significantly lower energy prices. And in the process of going through all of this, I took a look at just the comparison data that exists. You can search it for yourself. And when you compare energy prices on a per kilowatt hour for Jamaicans, whether it be residential or business, it is significantly higher than the average experienced across the world," she outlined.
In the meantime, President of the Private Sector Organisation of Jamaica Metry Seaga has said the business community must be included in the consultation process for selecting the new island-wide distributor of electricity.
Minister Vaz agreed that feedback from relevant parties is necessary.
"This is a very important national issue, so we can't treat it as partisan as we usually do. And in my usual style, I always have discussions with my counterparts, shadow spokespersons in whichever portfolios I have, because I believe that's the right and proper way. In this case, I don't know how much they can help me based on the previous licence, but I'll still include them in the consultation and discussions," he promised.
He said the government will hire a consultant to manage the process.
The existing JPS licence came into effect in 2001.
'Fundamental to our future'
Meanwhile, the opposition People's National Party said it notes the government's announcement on Tuesday morning that it will not renew the JPSCo all-lsland licence under the current terms.
Opposition Spokesperson on Energy and Climate Change, Phillip Paulwell, asserted that he has repeatedly alerted the government of the impending expiration of the JPSCo licence and urged the minister to establish a team to assess the environment and prepare for negotiations from as early as 2023.
According to Mr. Paulwell, the conditions under which the JPSCo licence was granted in 2001 have changed substantially, and this reality demands new terms for better service to Jamaicans.
"I declare that the negotiations for a new JPSCo licence is fundamental to our future, and that the next PNP government will negotiate new licensing terms to remove the JPSCo right of first refusal, to lessen the time period of the duration of the licence from 20 years to less than 10 years, to implement monetary-competitive tender for new generation, to expand rights for special economic zones, to generate and distribute power. Electric surprises have risen from about US$0.25 per kilowatt hour in 2016 to US$40 and beyond today, driven in large part by heavy taxation and neglect in government policy," he argued.
Mr. Paulwell criticised the government's decision to abandon the Energy Council, which was designed to help a shape policy in the energy industry. Instead, he said, the government is now rushing to outsource advice from international experts, instead of consulting with local stakeholders.
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