MINISTER of Energy Daryl Vaz has declared that the Government is not putting all its “eggs in one basket” as it embarks on negotiations with the Jamaica Public Service Company (JPS) for a new all-island electricity licence.

Vaz told a post-Cabinet media briefing Wednesday that alternatives will be put in place in the event the Government and JPS do not agree to terms on a new licence.

The licence, now held by the JPS, expires in July 2027, and the Government — while repeatedly stating that it is determined to negotiate a “better licence” that will accrue to the benefit of consumers and investors — has signalled that there could be new players in the market come next year.

Vaz told the media briefing that the negotiations are being undertaken by a highly skilled team of professionals led by former permanent secretary in his ministry Carol Palmer, guided by United Kingdom-based company Francis Maude Associates (FMA), which provides expert advisory for public sector reforms.

According to Vaz, the team submitted its draft heads of terms to Cabinet on Monday for consideration and approval.

He said the heads of terms “outlines the principled features of the proposed licence framework” and was approved by Cabinet.

Vaz outlined that the detailed legal structure will be finalised and formal negotiations will commence with JPS beginning in April.

He explained that after this the FMA’s broader work stream schedule will advance into a 16-month sectoral framework development and implementation phase.

“This includes the preparation of a new Electricity Act, amendments to the OUR (Office of Utilities Regulation) Act, strengthening enforcement provisions… re-negotiation of power purchase agreements, updated policies to address system losses and grid resilience, and publication of a draft white paper setting out the full scope of reforms,” said Vaz.

The energy minister noted that the process also provides structured pathways depending on the outcome of negotiations.

These include new licensing arrangements for transmission, distribution, and generation, as well as transition support to Government and valuation mechanisms where required.

Significantly, Vaz said there will also be competitive engagement of alternative operators if necessary.

“We’re not putting all our eggs in one basket. If the negotiations with JPS do not prove fruitful we have alternatives that we can go to to make sure that come 2027 a new licence is in place for whoever it is,” Vaz remarked.

“This approach is deliberate, structured and reform-driven. It assures [that] by 2027, Jamaica will have in place a modern, transparent, and resilient electricity framework that protects consumers, strengthens regulation, attracts investments, and aligns the sector with the country’s long-term development objectives,” added Vaz.

He pointed out that following extensive damage to its electricity grid by Hurricane Melissa last October, the management of JPS requested a 10-year extension of the existing licence which was first negotiated by a People’s National Party Administration.

The energy minister said the JPS request, which was supported by the multilaterals, was not accommodated, as “the commitment that the Government made that a new licence would be in place by 2027 was a commitment that we could not break”.

“Therefore, we were able to separate the two issues — the damage from Melissa and [to] deal with that through a loan — and the continued negotiations for a new licence for better terms and conditions and better rates for the Jamaican public with a new licence.”

According to Vaz, the new licence will have better terms and conditions, as well as better rates for Jamaican consumers.

File: President and CEO of JPS Hugh Grant in discussion with Minister of Energy Daryl Vaz following a post-Cabinet media briefing late last year.