A betrayal of trust


With Betty Ann Blaine

Tuesday, November 13, 2012

Dear Reader,

The complete 180º turn that the government has taken regarding the Jamaica Public Service Company's monopoly licence is not just a contradiction or a flip-flop. It is a blatant betrayal of public trust, and it is no wonder that disappointment and outrage are being expressed all over the country.

On July 30, 2012, the Supreme Court of Jamaica ruled that the exclusive monopoly licence held by the JPS was invalid. The landmark judgement, handed down by Justice Bryan Sykes, was the result of a legal challenge mounted by the consumer advocacy group, Citizens United to Reduce Electricity (CURE).

CURE contended that the Electric Lighting Act did not allow for exclusivity in the energy sector, in that in fact the law had the opposite intent - to encourage competition in the market. Justice Sykes agreed, and ruled that while the JPS is allowed to operate an all-island licence, it cannot be an exclusive monopoly licence that shuts out everybody else. The Supreme Court's decision was seen by many as one of the most profound and far-reaching judgements ever made in the history of Jamaica's jurisprudence.

The minister of energy, visiting at the time with JPS owners overseas, lauded the judgement and congratulated CURE on the victory. After all, it seemed clear that CURE had cleared the path for Minister Paulwell to do what he had been saying he wanted to do - to bring to an end to the JPS monopoly.

Ever since he assumed office, the energy minister had been expressing his government's desire to dismantle the monopoly held by the light and power company. In fact, the minister's position was not solely a personal or ministerial intent. Embedded in The People's National Party's manifesto is the promise to promote competition and diversity in the energy sector. If Minister Paulwell had been exuberant about ending the JPS monopoly, it is probably because he was confident of the collective PNP view expressed in the party's manifesto.

The minister's public utterances about the need for competition in the energy sector, coupled with the successful Supreme Court decision, augured well for the people of Jamaica. Finally, a new light (pun intended), however dim, began to appear at the end of the dark tunnel. Consumer confidence was further bolstered by the announcement that the bauxite companies would be given the green light to utilise coal as the energy source for that industry. It appeared as if the market was finally being opened up to diversity and competition.

If anybody understands the benefits of a competitive environment, that person is Phillip Paulwell. As technology minister, Paulwell presided over and was instrumental in the dismantling of the telecommunications monopoly which has resulted in the lowering of rates to Jamaican consumers. A few months ago, consumers witnessed the lowest mobile phone rates ever at $2.89 per minute. Everybody knows that when markets are opened up to competition, the people benefit, and the telecoms market is the best available example right now.

The announcement last week that the government has decided to go full speed ahead with joining the JPS in appealing the Supreme Court's ruling is puzzling to a lot of Jamaicans, given the minister's pronouncements and actions. The question being asked is: Why would the government move to challenge the right of Jamaicans to lower electricity bills?

CURE believes that the government's decision reflects a deep split inside the PNP administration, despite the united front being projected. The country got a hint of the difference of opinions when the prime minister's special adviser, Carlton Davis, was quoted as saying that "monopoly is best" at the very same time that the energy minister was calling for the end of the monopoly. Mr Davis's statement is yet to be fully explained and resolved.

But if that contradiction wasn't perplexing enough, the government's appeal of the illegal monopoly ruling is astounding to everyone I talk to, and the explanations offered in Parliament last week by the attorney general and the energy minister have only served to further muddy the waters.

To suggest that the dismantling of the monopoly would not serve the interests or imperatives of competition and eventually reduce the cost of electricity is an insult to the intelligence of the people of Jamaica, as is the superfluous argument about establishing multiple grids. CURE's position is clear and simple: "JPS's illegal licence must be renegotiated to enable new players to enter the market and to allow for diversification without any obstacles whatsoever, and with the objective of reducing the cost of electricity." CURE understands that JPS's generation capacity and its significant investments in the energy sector must be carefully respected and negotiated in the best interests of the company and the people of Jamaica.

Even more disingenuous is the government's excuse that its appeal is also contingent upon the payment of costs to the claimants in the successful landmark case. As a co-founder of CURE, I wish to inform the government that the interests of the Jamaican people far outweigh any financial considerations, and so CURE stands ready to negotiate. Over to you, Minister Paulwell and Mr Attorney General!

With love,





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