EDITORIAL - Watch the hype, Mr Mullings

While we understand the sense of urgency of the energy minister, Mr Clive Mullings, and his wish to show policy success, he must, nonetheless, curtail any tendency to oversell achievements. Further, he must be wary of any attempt by his handlers to fabricate them.

We offer this advice to Mr Mullings in the wake of the almost breathless fashion with which he hit the airwaves this week to announce the "successful renegotiation" of aspects of the electricity generation and distribution licence of the Jamaica Public Service (JPS).

Mr Mullings' frenetic media-hopping apart, there was the statement from his ministry declaring the renegotiated licence's expected effect of enhancing efficiency and strengthening the "regulatory framework to facilitate investments in the energy sector". Having gulped, it is perhaps useful for there to be a measured, even if limited, review of what has been done.

First, we appreciate that energy, or more correctly, the cost of electricity, is on everyone's mind. It is expensive.

We are clear, too, that JPS is the visible and easy target. It is the monopoly distributor of electricity. And it has very bad, if not atrocious, customer service, which is worse at times like these when consumers are feeling a severe pinch.

Yet, the undertakings of which Mr Mullings has assumed ownership, and so hyped, will not, in the short term, have any impact on the price consumers pay for electricity or fundamentally affect the way the JPS operates. Which is not to say that they are of no merit. In any event, they are mostly the coming together of administrative undertakings by the Office of Utilities Regulation (OUR), over which that agency has been consulting for a long time.

Take the case of net billing, which will allow small, including domestic, producers of electricity from renewable sources to set off the difference of what they supply to the national grid against what they consume from JPS. The OUR has been working at this for more than half a decade, and began its formal consultation in 2009.

No fundamental renegotiation

The OUR has now promulgated its so-called standard offer contract to be used by the JPS and suppliers under this arrangement, including the method for calculating the price JPS will pay suppliers. This demanded no fundamental renegotiation of JPS's operating licence, since the minister already had the power to provide a generating licence to anyone. Indeed, electricity generation is the part of the business where JPS has no outright monopoly.

Additionally, it is largely an administrative exercise for the OUR to lift, from 15 megawatts to 25 megawatts, the threshold of generating capacity for which competitive tender is not required. JPS will probably welcome this move, given that it has complained how the old arrangement limited the pace at which it could install a new plant.

Power wheeling, like net billing, is one of those matters that the OUR has been working at too slowly. It will allow self-generators of power to produce in one part of the country and use that electricity in another. The OUR has now worked out a method by which the JPS can charge for transmitting that electricity along lines. That's good for these operators.

The real big issue is when we will see a substantial conversion to cheaper fuel sources and if Mr Mullings removes the JPS's monopoly on transmission and distribution.