News
Too High, JPS
Spanish ambassador says electricity costs hurting investors
BY COREY ROBINSON Observer staff reporter robinsonc@jamaicaobserver.com
Friday, June 04, 2010
SPANISH Ambassador to Jamaica Jesus Silva yesterday bemoaned the high price investors have to pay for electricity in Jamaica, saying that it is hurting the ability of local and foreign investors to stay in business.
“The electricity factor is a very great hurdle to make investment in Jamaica profitable. It is a concern that the foreign investors have, and it is a concern also shared by some companies of the private sector,” Silva told the Observer, after speaking to the issue at the Rotary Club of Kingston’s weekly luncheon at the Jamaica Pegasus Hotel in New Kingston.
Silva raised the concern ahead of an expected energy charge adjustment on Jamaica Public Service (JPS) rates normally made in June each year. The impending increase has started with some entrepreneurs arguing that JPS should forego the adjustment, given the difficulties last week's unrest in Kingston have created for the economy.
Two adjustments last year — the latter in October — pushed up non-fuel energy charges by as much as 49 per cent. The hotel sector was hit particularly hard by those increases with many resort operators seeing their costs go up by as much as 70 per cent, Silva said yesterday.
He said that due to the high cost of electricity, Jamaica has become the second-most expensive country in the Caribbean for Spanish hoteliers, and that the problem is threatening their viability.
"There is only one country which is more expensive — Bahamas, which is only a little bit more expensive," Silva said. "But apart from that, they (investors) are paying something like 50 per cent more than in the Dominican Republic, which is an expensive country, and almost 100 per cent more than in Mexico," he said.
He added that poor quality of service from the JPS is also a cause for concern, citing reports from the Fiesta Hotel Group in Lucea, Hanover, that more than US$500,000 worth of equipment have been destroyed due to power surges and other electrical failures.
"And if they (investors) want to generate their own electricity the regulation does not allow them to import the petrol with the attractive prices to make that solution attractive," he explained, noting that the investors had no choice but to contract the services of the utility company.
Yesterday, Omar Azan, president of the Jamaica Manufacturers' Association, concurred with Silva's statements, and supported the diplomat's call for solutions from the Government.
"When compared to Trinidad, which is our major competitor in the manufacturing sector, our electrical costs are just much more expensive," said Azan.
"The Jamaica Public Service, which basically has a monopoly in Jamaica, needs to find a way to get some investment so they can get new equipment to be more efficient, rather than just increase rates, which are already too high," he said.
Last month, JPS's first-quarter results showed the company earning US$9.4 million (J$841 million) net profit after tax due to a 40 per cent jump in revenues with core expenses remaining flat for the quarter.
 
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6/5/2010
Dear Hon.Ambassador Jesus Silva,
thank you very much for your JPS comment,we all suffering from this high bills,not only the Spanish investors,good that you talk about it,nobody talks with us ...with best regards
axel wichterich,Marblue Villa Suites
6/4/2010
Elli, good points. I use to read my meter and record the reading every month and also I would do it at the same time and date each month. I also compared their readings with mine and how much I used based on my own readings. I had to set the alarm on my phone for this but it worked out because I made myself very aware of what I was using. Whenever I move back home I will have to look into the solar energy options to take the "chill" off the bill.
6/4/2010
For many reasons the Lines must be laid underground; for a effecient service during the Hurricane Months, for earthquake purposes, the radiation from the wires above which is no way healthy. I will measure the radiation and submit it to JPS, on my next Visit Home.This company is acting contrary to the laws of modern technology. Out dated meters which give's a in-consistent flow reading. As a result of this, consumers are issued In-Accurate estimate bills on a regular basis. PLAIN ROBBERY:)
6/4/2010
This is a issue I've always complained about, and here is it again, this time by a investor. The High Cost of electricity, and the very poor service offered, it's time you People stage a demonstration. It take's a foreigner to raise this issue?. Where is our Minister of energy?. It has become's a Luxury for the average Consumer out there. This very poor in-effecient service is mostly felt during the Hurricane seasons. The lines must be placed underground.
6/4/2010
Regulation may not be working to make JPSCo more efficient and more reliable. Taxes on JPSCo's profits are in order. A reliability tax should be introduced so that whenever JPSCo goes out they should pay the GOJ JA$1 per customer affected for the event itself & JA$0.10 per minute per customer for the event's duration. Such taxes should be adjusted for inflation & devaluation. Fossil fuel heat engines below 35% efficiency should be taxed at a rate of JA$1 per MWh times the % below the 35% floor.
6/4/2010
A monopoly has no incentive to be efficient. That is why most countries have Anti-Trust laws. Competition can force a company to become more efficient or go bankrupt. This is yet another example for poor economic policy decisions by the Jamaican Government. Both the PNP and the JLP will continue to sell the country to the highest bidder, while taking their requisite "Donation", until there are checks and balances introduced into our Consititution.
Continue to beg JPS, its falling on deaf ears.
6/4/2010
Those JPS bills............I still get nightmares.................
6/4/2010
The GOJ cannot tell JPS nothing, they have signed a contract with them giving them full authority to raise charges as they see fit. So unfortunaltely Mr Ambassador, in Jamaica nothing works. Just take your business elsewhere, you will be safer and you will not have to deal with the bureacratic bungling, which is a signature of doing business in Jamaica, who needs that kind of nonsense
R. Edwards. NYC
betterlifeforjamaicans@yahoo.com
6/4/2010
Long time people have been complaining about this. JPS is inefficient and the government needs to be more forceful in getting JPS to improve their service. Jamaicans have long been calling for more accommodative policy for renewable. JA will continue to experience the slow growth with JPS, crime and high interest rates.
6/4/2010
J$841,000,000.00 profit in 3 months is not enough? Come on JPS, you cannot be serious about this. Extrapolated for 12 months the probable profit is J$3,364,000,000.00 which is a staggering sum. And that is not enough?
We should all pray that the OUR reject the application.
6/4/2010
JPS is too inefficient in their production and distribution. Electricity theft is high but they do little about it as they can just pad on those costs to those of us who are legally connected.
Quality and reliability of the supply are also of concern - so many appliances zapped. Their usual quip is that you should have a surge guard on your equipment. This signals that they do not intend to change for the better.
6/4/2010
The answer has to be net metering! It works everywhere else it has been implemented.... Takes the emphasis off massive capital investment and passes it on to the consumer, who in turn can write off their investment by way of tax credits.... Simple if you can side step the monopoly issue....
6/4/2010
TIme for the government to provide greater incentives for alternative energy: solar, wind etc... For too long families, businesses and other institutions have been at the mercy of the JPS....
6/4/2010
another great point he made is the destruction of peoples appliances without compensation. when the electricity destroyers my computer or fridge the JPS will not pay for it and i am made to take the loss. untenable.
6/4/2010
Does JPS mean Jus Punish Smaddy?
6/4/2010
Otis grant, Jesus Silva is the best Ambassador Jamaica has ever had from any country, He has actively lobbied his fellow country men to invest in jamaica; And he has gotten many investor to come (Rui , Fiesta, Iberostar) and these are just a fews. If we had four other ambassador that worked equally hard as Jesus Silva, Jamaica would be jewel of the Caribbean again!!!!
6/4/2010
Eliminate the high rate of electricity theft that occurs from both residential and commercial sources and just maybe, we will see a reduction in our bills. Too many thieves in Jamaica, including the rich!
6/4/2010
and we have to be dodging bullets at the same time too....
6/4/2010
Didn't the investors know that before they decided to do business here?
6/4/2010
OH GOD ! This the 1st time i am hearing about this ambassador but mi rate him !! For him to B in that position & come out & say things like this shows he has CAJONES. Jamaicans R being raped by JPS with the complicity of the govt. If crime & JPS rates were to be reduced by 1/2 can one imagine the explosion of business & investment this country would see? These R the things the media should be highlighting daily in an effort to effect change $ stop politicking.
6/4/2010
And we hear we will soon have to pay more.
6/4/2010
JPS (Marubeni) is swimming in money and thd service is horrible.
How is that good for Jamaica?
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