LIGHT and power company, Jamaica Public Service Company (JPS) plans to spend US$56 million ($4.8 billion) to upgrade its plant and equipment in 2010, which will include a windfarm, while the firm noted that the future introduction of liquefied natural gas (LNG) will slash energy costs for Jamaicans.

The investment is flat compared with previous years, but will see JPS reduce its reliance on oil via renewables. However, JPS chairman Tomofumi Fukuda was yesterday anxious about the savings that could result from the introduction of LNG or coal.

“It is very important to bring gas or coal to Jamaica immediately because gas prices are down, so it is very good timing. Coal is the most competitive fuel but it has issues,” he said yesterday at the JPS annual general meeting at Jthe company’s headquarters in Kingston. “Definitely we have to take immediate action. And from that perspective I appreciate the government’s strong initiative to bring LNG.”

Fukuda said that a LNG plant would take about one year to construct and a clean coal plant would take six years. Last month, energy minister James Robertson announced the selection of a Belgium company — Exmar — and its consortium, as preferred bidder to construct a LNG floating regassification unit here for supply of the fuel to JPS and bauxite companies. Robertson argued that a conversion to LNG could save approximately US$350 million on the country’s annual oil bill, while allowing manufacturers and householders up to 30 per cent cheaper electricity rates.

Yesterday Fukuda said that governments have delayed the introduction of LNG for many years.

“Its been nearly 10 years since Jamaica has been discussing LNG or coal and nothing happened. So we wasted 10 years,” he noted.

Regarding its investments in renewables the company stated it would introduce its first wind powered plant next month and begin steps to construct two hydro power plants in Maggoty and Great River.

“If we see the performance of the wind farm as successful then we will go for second phase. At the same time we are doing the engineering of a new hydo-system in Maggotty and also we started a feasibility study for another hydo plant in Great River,” stated Fukuda. “JPS will gradually increase its reliance on renewables so that you will not have to see the fluctuations in your bills with the oil price.”

At the same time it wants to replace its aged Old Harbour plant.

JPS earned US$9.4 million ($808 million) net profit after tax due to a 40 per cent jump in revenues with core expenses remaining flat for the quarter ending March 2010, which reversed the US$1.6 million ($137 million) loss it made in the similar quarter in 2009.

The company’s profit performance resulted from a US$64.8 million jump in revenue over the corresponding quarter in 2009 to US$223.1 million, and only a 4.4 per cent increase in operating expenses to US$32.9 million from US$31.5 million comparatively, according to financials released on the Jamaica Stock Exchange in May.

Revenue was affected by fluctuations in the global price of oil used to produce electricity. JPS fuel cost rose to a whopping US$139.9 million in the review quarter from US$76.4 million in the similar 2009 quarter. The JPS is also benefiting from an energy charge that the Office of Utilities Regulations approved last year which represented an increase in rates of 23 to 29 per cent.