THE Opposition Jamaica Labour Party (JLP) yesterday accused international energy firm, Mirant, of milking its local subsidiary, the Jamaica Public Service Company (JPS), to meet debt payments in the United States and called for an enquiry into the matter.

“The time has come for the Jamaican consumer to be given a fair shake. We need an enquiry into the JPS,” the party’s spokesman on energy Clive Mullings told a press briefing at its Belmont Road headquarters in Kingston.

He suggested that there was a need to focus on the billing system at the JPS, and that the enquiry should be at a very high level, “with persons who are acquainted with the energy sector internationally”.

But, in a reaction to the statement, JPS corporate communications chief Winsome Callum refuted the suggestion, stating that the “JPS is definitely not being relied on to assist Mirant out of debt”.

Callum said that Mirant has over 18,000 MW of generating capacity worldwide, and assets of approximately US$11 billion. Mirant’s international operations, she said, include companies in the Phillipines, Curacao, Jamaica, Trinidad and Tobago, and The Bahamas, which account for approximately US$3 billion of Mirant’s assets.

She said that at June this year, JPS had contributed approximately US$17 million of the total US$194 million Mirant earned from its international operations. Mullings had told the press briefing that the JPS contributed US$6.7 million of a US$99 million profit.

“JPS currently contributes approximately nine per cent of the income Mirant earns from its international operations. The JLP statement is erroneous and must be corrected,” Callum said.

Mullings told yesterday’s briefing that under section eight of the OUR Act, the OUR has the authority to have an enquiry and to summon witnesses and procure documents.

He noted that in California, where Mirant agreed to pay state attorney-general Bill Lockyer approximately US$750 million in January this year to settle allegations of price gouging and other unlawful conduct, records and documents were subpoenaed by Lockyer to uncover the activities of Mirant under his jurisdiction.

Mullings said that he has been in contact with the AG’s office in Sacramento, California and still pursuing communications in order to get more information on how he uncovered the information about Mirant’s operations.

“I want to know what to look for and how to look,” Mullings told the Observer after the briefing. “But, I think the problem is in the billing.”

At the same time, he questioned the light and power company’s insurance claims as well as its analysis of full restoration of electricity following Hurricane Ivan a year ago.

“The question therefore arises, what impact does Jamaica have for the bankrupt Mirant? With the automatic price increase built into the licence, is Mirant expecting the overburdened Jamaican consumer to bail them out?” Mullings asked.

He said that it has been reported that Mirant claimed an increase of US$7 million (J$430 million) in the Caribbean operations’ gross margin primarily due to regulatory approved rate increases in non-fuel tariffs at JPS in June, 2004.

But Callum said last night that it should be borne in mind that the $500 million profit made by the JPS in the first quarter of the current financial year came after two years of losses. She added that this should be compared with the J$42 billion in assets that the company has. She said that many other large companies were making significantly more on their investments.

According to information available from Mirant’s website, it is a competitive energy company that produces and sells electricity in North America, the Caribbean and the Philippines. Mirant owns or controls more than 22,000 megawatts of electric-generating capacity globally and operates an integrated asset management and energy marketing organisation from its headquarters in Atlanta.

Mirant depends primarily on earnings and cash flows of its subsidiaries to fund its operations, and its subsidiaries defray substantially all of its obligations, including principal and interest on its indebtedness.

Mirant Corp, Mirant Americas Generation, LLC, and substantially all of the companies’ wholly-owned subsidiaries in the United States are included in the Chapter 11 filings.

Excluded from the filings are the company’s operations in the Philippines and the Caribbean.