Jamaica power utility raises gas-push ‘threat’

“The development of a viable LNG supply source to Jamaica has been a significant benefit to JPS customers through more stable supply costs for generation. However, it has also opened options for large customers to develop their own on-site generation and reduce or terminate service from JPS.”

So reads Jamaica Public Service’s 2019-24 tariff application submitted to the Office of Utilities Regulation (OUR) which has until May 12 to issue a decision.

JPS argues that customer grid flight may impact its integrated system and utility-grade reliability planning, and pressure rates upward for remaining customers.

“Our response to this very real threat to business and network churn will be targeted, sustained and high value to customers. We will retain large customers by designing commercial offers that deliver significant value and cost savings,” says JPS.

JPS serves 658,052 customers of which 89% are residential consumers and account for 33% of billed energy sales. The general services segment represents 10% of the company’s offtake and consumes 19% of billed energy, while large industrial and commercial clients make up less than 1% of the customer base but consume 46% of total billed energy.

The utility also highlights the increasing contribution of independent power producers (IPPs) which it forecasts will account for nearly 70% of supply by 2021.

This month, New Fortress Energy put into commercial operation a gas-fired power plant at bauxite and alumina producer Jamalco's alumina refinery that is injecting 100MW into the grid.

CAPEX

Through 2023, JPS has forecast capital expenditure of US$478mn, the bulk of which will go to distribution (US$153mn), loss control measures (US$105mn) and transmission (US$91mn), according to the tariff application.

Meanwhile, US$84mn has been earmarked to overhaul generation units and US$24mn for IT.

In December, JPS subsidiary South Jamaica Power launched operations of the 194MW Old Harbour gas-fired plant (pictured) which will replace 292MW of steam units, and by 2023, JPS plans to retire a further 168MW and commission a new 40MW gas plant in Kingston.

In addition, the service provider is evaluating opportunities to undertake utility scale solar and wind power projects as part of the government’s goal of increasing renewable energy’s footprint to 30% by 2030.

The 394-page tariff application is available here.

This month, JPS was scheduled to present the plan at town hall meetings which OUR cancelled on Thursday.

“The Office of Utilities Regulation, in complying with government’s guidelines which provide for mitigating measures to prevent the spread of the coronavirus in Jamaica, will postpone the series of townhall meetings.  We will be discussing other ways through which we can consult with customers of JPS on this important matter," the regulator said in an email to BNamericas.