CEO of Pan Jamaica Group Jeffrey Hall is prodding the authorities to break the stranglehold light and power company Jamaica Public Service (JPS) has over the transmission and distribution of electricty, and allow competition in that segment of the market. Hall said such an action must take place when the company’s licence comes up for renewal in the next four years.

“The idea that there is a monopoly that includes transmission and distribution and has a first-refusal right over replacement generation, that is not a given as a business model in the interest of producing electricity so what I would say to the OUR is that: ‘We need to open that up,’ ” Hall told the audience as he addressed the Office of Utilities Regulation’s (OUR) 10th Annual Director General’s Stakeholders’ Engagement on Tuesday, March 26, under the topic: ‘Regulating Utilities to Impact Productivity and Investment’.

JPS previously held the rights as the sole generator of electricity in Jamaica, however this was changed in 2004. That change brought competition in the market for generating electricity, with players such as Jamaica Energy Partners emerging as a big producer along with smaller renewable energy producers such as Wigton Windfarm who have to sell their power to the JPS grid for transmission and distribution around the country. Hall indicates that with the Government pushing to expand renewable power generation, dismantling the monopoly held by the JPS over transmission and distribution could influence more investments.

“We have the ability to go solar, and I do think that renewables will become more price-competitive… I think we will have a ton of bids for this offer — and it will be price-competitive — but the question is going to be around market structure,” Hall said.

Hall referenced the Dominican Republic in which he says there are three distribution companies for a monopoly transmission business, as well as New Zealand which offers a good example of operating an electricity grid with a relatively high penetration of renewables.

“The other question that I think Jamaica needs to be very honest about is the restriction that exists on the ability to sell electricity — whether back to the grid or third parties. I think a conversation needs to be had about that. And then another important conversation related to that would be on grid defection,” Hall said.

JPS’s Amended and Restated All-Island Electric Licence grants the light and power company the exclusive authority to transmit, distribute, and supply electricity for both public and private purposes across Jamaica. Attempts were made to get discussions in Parliament in 2011 to amend the licence to allow for more competition, but that process stalled.

But with a push now on to generate about half the country’s electricity from renewable sources such as wind and solar by 2030, stakeholders are also urging the authorities to guarantee that this transition will safeguard consumers from rising electricity costs.

Currently Jamaica is trying to attract investments for an additional 100MW from renewable energy sources, and has advanced the process to the request for proposals (RFP) stage; the due date for receiving bids under this process is April 5, 2024. But as the time nears, director general of the Office of Utilities Regulation Ansord Hewitt has cautioned that there is no point in rushing the switch to renewable energy, particularly if the changes will lead to steep increases in electricity rates.

“That in itself creates problems for your environment. The people who cannot afford electricity, apart from stealing it, they will engage in unsafe environmental practices as well so we have to calibrate our transition to renewables in such a way that it does not create a problem for the cost of electricity. That’s the task that we are focused on,” Hewitt said as he addressed the OUR’s 10th Annual Director General’s Stakeholders’ Engagement.

When Jamaica started the move to expand renewable energy sources in electricity production it was touted as a development that would improve energy security while also cutting electricity costs for consumers. But experts say the initial set-up costs will likely have the opposite effect in the medium term in the form of higher electricity bills.

Currently, Jamaica gets 12.9 per cent of its energy from renewable sources on the grid, up from five per cent seven years ago.

To achieve the “ambitious” 50 per cent target set by the Government much more needs to be done, and swiftly too.

OUR has been doing its part, Hewitt says, through the provision of critical support to the Ministry of Science, Energy, Telecommunications and Transport (MSETT) in discharging its planning functions and the Generation Procurement Entity in its generation procurement functions.

Concurrently, it continues to urge that renewable energy integration should be so managed as to ensure that the overall planning period — short, medium or long term — does not raise the overall cost of electricity to the public.

“Switching to renewable energy really does not benefit the society unless it is going to reduce the rate of electricity or at least keep it where it is,” Hewitt said.