The country’s three major private sector lobby groups have welcomed the Government’s announcement that it does not intend to renew the Jamaica Public Service Company’s (JPS) all-island licence under the existing terms, describing the decision as a recognition that “Jamaica’s electricity sector is in urgent need of reform”.

“The Government’s objective to renegotiate licensing terms in pursuit of more competitive pricing and improved national energy security is aligned with long-standing calls from the business community for structural transformation in this space,” the Jamaica Chamber of Commerce, Jamaica Manufacturers and Exporters Association, and the Private Sector Organisation of Jamaica said in a joint statement hours after Energy Minister Daryl Vaz shared the Administration’s decision at a media conference.

Vaz told journalists at the Office of the Prime Minister that he had formally notified JPS of the decision in writing “pursuant to Condition 27 of the licence which provides for the Government of Jamaica to acquire the licensed business at the expiration of the term of the licence” two years from now.

The expiration date is July 8, 2027.

He said the Government has no intention to take charge of the operations of JPS. However, the Administration intends “to negotiate new licensing terms and conditions with potential investors which are favourable to the people of Jamaica”.

“My statement to the media at this time is intended to provide clarity and transparency around the Government’s objectives, the process that is underway, and to reiterate our commitment to securing better outcomes for the Jamaican people,” the minister said.

Outlining the history of the current agreement, he pointed out that the former People’s National Party (PNP) Government had entered into an all-island licensing arrangement with JPS in 2001.

“Subsequently, the PNP Administration further entered into a binding agreement to amend provisions of the 20-year all-island licence. I think we can all agree that the people of Jamaica have not been served well by the existing electricity supply arrangements. 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,” Vaz said.

That point was highlighted by the private sector groups, who pointed out that high energy costs have long presented a significant barrier to growth for businesses and an undue burden on households.

“Jamaica loses approximately 28 per cent of the electricity it generates — one of the highest system loss rates in the region, far exceeding the Latin American and Caribbean average of 15 per cent. These include both technical losses and non-technical losses such as electricity theft,” the groups said.

These losses, they argued, “significantly drive-up electricity costs for paying consumers, deter much-needed investment, and undermine confidence in the energy system”.

The groups also said that Jamaica’s electricity rates remain among the highest in the Caribbean, averaging US$0.28–0.30/kWh, compared to countries like the Dominican Republic and Trinidad & Tobago, which have rates closer to US$0.12–0.15/kWh.

“Reform is not optional, it is essential,” the groups argued.

They recommended that any new licence or regulatory framework must be anchored in three core pillars:

1) Fuel Mix & Diversification: Accelerate the integration of renewables and cleaner fuels into the national grid. This includes re-evaluating legacy power purchase agreements that lock consumers into uncompetitive pricing and taking advantage of the falling global costs of solar, wind, and battery storage.

2) Implementation & Execution: Policy ambitions must translate into real-world improvements. This includes:

• updated time-of-use tariffs

• expanded wheeling arrangements

• streamlined approvals for renewable projects

• modernised grid access rules, especially for commercial-scale producers; and

3) Access to affordable financing which is vital for businesses to invest in cleaner energy.

They called for the creation of concessional loan facilities in the 4–6 per cent interest range, backed by guarantees to de-risk lending for financial institutions; modernisation and digitisation of the grid to reduce technical losses and improve reliability; aggressive action against electricity theft, including surveillance, metering upgrades, enforcement, and public education; greater data transparency, particularly from the Office of Utilities Regulation and industry players, to support evidence-based policymaking and investment decisions; and alignment with national energy goals, including achieving 50 per cent renewable energy by 2030 and reducing average electricity costs toward US$0.12/kWh.

“As representatives of Jamaica’s private sector, we fully support the Government’s commitment to developing a modern, efficient, and sustainable electricity system — one that leverages the global decline in renewable energy costs and prioritises affordability, reliability, and environmental responsibility. This transition is critical to Jamaica’s long-term economic resilience,” the business leaders said.

They also said they were encouraged by Vaz’s assurance that the process will be consultative, and requested formal engagement of private sector stakeholders throughout the design and implementation of the new energy framework.

“The private sector is not only a major energy user — it is also a potential partner and investor in this critical space. This is a once-in-a-generation opportunity to correct long-standing inefficiencies, promote innovation, and deliver a more equitable, cost-effective energy future,” the groups said, echoing Vaz’s statement that the current juncture represents the first opportunity presented to the Government to “secure terms which better serve the people of Jamaica”.

“The current licensing arrangement 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,” Vaz added.

Shortly after the news conference, JPS issued a statement, saying that “the development has several implications for the energy sector and for the country in general”.

“Regardless of the path forward, we assure our customers that JPS remains steadfast in our commitment to deliver safe, reliable, resilient, and cost-effective electricity service to the nation,” the statement quoted President and CEO Hugh Grant.