THE Government is being pressed to move now to negotiate with the Jamaica Public Service (JPS) for concessions to be made ahead of the expiration of its licence, to allow developers within the special economic zones (SEZs) to not only generate power, but to sell to occupants in the zones.

Opposition spokespersons on energy and commerce argued at Thursday’s meeting of the joint select committee, which is reviewing the Electricity Act, that an integrated approach needs to be taken to the laws governing electricity in special economic zones, as the high cost of electricity and the JPS’s exclusivity in the the domestic market is stifling investment in the zone.

Spokesperson on energy Phillips Paulwell said with the end of the JPS’s electricity licence on the horizon, the Government should move now to put provisions in place before then, to liberalise the electricity market in the zones. Colleague spokesman on commerce Anthony Hylton said it was unfair to expect investors to come, while bearing the burden of high electricity bills from the JPS.

Hylton noted that the SEZ Act itself provides for self-generation, but doesn’t go far enough. “In the SEZ Act developers are allowed to self-generate, but no provision subsequently has been made to really carry through and address some of the issues that arises from that. We need to take fully into account the fact of self-generation that is made possible under the SEZ Act and to carry it to its logical conclusion,” he stated.

He said once the Government makes its policy clear on the matter, “it’s up to the JPS to recognise what time it is. It’s up to them if they want to subject themselves to a challenge”.

The energy ministry’s legal team pointed out that the JPS has exclusive permission to sell, and distribute electricity, whereas neither the Electricity Act nor the SEZ Act permits the supply or sale of electricity by the developers to anyone outside of the JPS, which means they are not allowed to sell to the occupants in the zone.

The Opposition MPs countered that the jurisdiction of the SEZs is unique.

“The [SEZ] Act created a space in Jamaica, a distinction and a space between the customs zone, and the rest of Jamaica. Activities in the SEZ for the importation and exportation of products into the SEZ are not considered importation or exportation from Jamaica. So we have to look at that legal construct that is created globally and is available under WTO [World Trade Organization] arrangements,” Hylton explained.

He said an injustice is being done to developers. “They are not seeking net-billing, they are quite content in supplying to their occupants. We can confine it to the occupants. The effect of what we have done is that we have said to the developers, come in, invest your money, you can generate but only for yourself, and that only takes into account a single entity, where the Act itself provides for multiple occupants in the SEZ,” he said, pointing out that at the same time large users or those who have the ability, in the domestic space, are allowed to defect from the grid.

“But people who we are inviting as investors, they must now find all the money to develop, bring their own clients, and then turn it over to JPS and say here, give us this bill that makes us uncompetitive. Nobody is prepared to come under those circumstances…it’s not fair, it’s not just, and it’s not logical,” he argued.

Emphasising the point, Paulwell said SEZs essentially operate as foreign entities, and are not considered part of local customs: “You operate in these zones a foreign enterprise because these companies are producing goods and services exclusively for the export market”.

The discussions arose around Section 18 of the Electricity Act, which speaks to the codes governing self-generation. The Jamaica Chamber of Commerce (JCC) in its submission had pointed out that the requirement for a self-generator to maintain an electricity system in accordance with the generation code was not the standard to which to hold a household a commercial personal generator.

The JCC noted that there are other pieces of legislation which confer standards and duty of care on these categories of generators. It also took issue with the fact that the fines for not adhering to the code as a self-generator is the same as that of an independent power producer. The committee is now reviewing the matrix of submissions which have come before it from various stakeholders.