KINGSTON, Jamaica — The Government has signalled it will not be renewing the Jamaica Public Service’s (JPS) all-island licence to supply electricity without re-negotiation of the current terms, and is open to exploring other contracts with interested parties.

Minister of Science, Energy, Telecommunications and Transport Daryl Vaz made the announcement during a press briefing on Tuesday.

He indicated that the Government’s position was that the licence itself, which was signed for a 20-year period and gives JPS the power to operate, was “flawed”, resulting in “flawed service”. However, the Government will continue to operate under those conditions as mandated, until its expiry in 2027.

“In the meantime, the Government of Jamaica is going to start looking at our options, [those] options include any and everybody. Whoever it is that we end up going to the table with for a final negotiation for a new licence with new terms as of May 2027 will be terms that are favourable to the Jamaican people,” he said.

Vaz maintained that, under its current terms, the licence has not served the country well.

“The terms under the current licence have yielded electricity prices which are amongst the highest in the region. The arrangements are deeply flawed and in need of significant reform,” he said.

Forefront in that reform must be an increase in the use of renewable energy to generate the country’s electricity, according to Vaz.

“There has been a significant global reduction in the cost of renewables. The Government of Jamaica is determined that consumers of electricity in Jamaica should be placed in the best position to benefit from these developments. The current licensing arrangements with the JPS does not provide sufficient incentives to bring renewables onto the grid at scale, and it provides for generation via imported fossil fuels which is not cost-effective,” the minister said.

JPS was informed by letter of the Government’s intention to renegotiate, via condition 27 of the current licence, which allows the Government to acquire the licensed business at the expiration of the term of the licence, Vaz explained.

He stressed that the Government does not intend to take over electricity provision, and will instead renegotiate.

The minister maintained that the timing of the announcement, months before an election is expected to be called, was in fact the best “first opportunity presented to the current administration” to renegotiate the contract from a position of authority, pre-empting accusations of it being an election ploy.

“These were the timelines…July 8th 2023 for the Government to communicate to the licensee… and 2027, for the expiry of the existing licence,” he said.

Added Vaz, “We are getting an opportunity to draw a line in the sand, learn from our mistakes on an even keel to get the best results.”

In fending off the possibility of lower quality of service as the contract comes to an end, Vaz said he would deal with any dip in service quality by employing the strength of the Office of Utilities Regulation (OUR), but stressed he did not expect this to happen.

— Dana Malcolm