'Emancipation' from JPS monopoly brings new dawn

Richard Crawford, Guest Columnist

On the eve of Emancipation 2012 and in the jubilee year of our Independence, Supreme Court judge Bryan Sykes made a landmark ruling in the case submitted to the court by Citizens United To Reduce The Cost Of Electricity (CURE) and claimants Betty-Ann Blaine, Dennis Meadows and Cyrus Rousseau on behalf of the Jamaican people, that the Jamaica Public Service Company (JPS) licence was, indeed, illegal and invalid.

This ruling will have a far-reaching positive impact on the society, showing that the people can contest injustices in the courts and be rewarded for their efforts, as well as the fact that even powerful monopolies can be successfully challenged and are not beyond the rule of law. Already, the overwhelming support from all sectors of society for Justice Sykes' decision is showing this to be so.

The claimants contended that the licence given to the JPS in 2001 was an illegal, exclusive, monopoly one, as it breached the Electric Lighting Act, which does not allow for monopolies, nor give any minister of government the authority to issue such a licence for the exclusive transmission and distribution of electrical power in the country. Therefore, the licence was of no effect and should be withdrawn.

This welcome victory for the consumers of Jamaica comes after years of suffering at the hands of the JPS, which was able to use its monopoly power to great advantage: to secure a minimum rate of guaranteed profits from its licence, as well as to disregard the problems of the consumers. This was made even worse as the Office of Utilities Regulation seemed to so regularly support the transgressions of the JPS.

NO TIME TO WASTE

Justice Sykes' ruling has legally and incontrovertibly opened the door for the Government to now move quickly and expertly to renegotiate the licence for JPS and pave the way for building a new, competitive energy regime for Jamaica, which is an indispensable requirement for our economic salvation.

There really is no time to waste. We all know that in 2011, some US$2.4 billion was used to import oil for transportation, bauxite production and to generate electricity. That electricity, at US$0.41 per kilowatt-hour is one of the highest rates in the world, that approximately one-third of our current Budget goes to buy oil and 54 per cent of our total import costs are for oil and food alone.

The issue of the cost of energy and the resultant uncompetitive nature of our industries, and manufacturing dominated an economic forum at the University of the West Indies (UWI) last week at the same time that the Supreme Court ruling was announced. Minister of State Julian Robinson is aware of the gravity of the situation and indicated that it is the single greatest priority of the Government to now settle the case of new, affordable energy for Jamaica, in partnership with JPS and other players in the industry.

Against this background, there has been some discussion surrounding the decisions of Justice Sykes, which also seem to say that the JPS has a valid licence to operate but not exclusively, nor in a monopolistic fashion. Further that the JPS may be considering appealing the Supreme Court's "decision that its exclusive licence is not valid".

There is some difficulty that needs to be resolved here, for as far as CURE understands, JPS has one licence, which CEO Kelly Tomblin says the company bought as an exclusive one. This may very well be so, but this exclusive licence is illegal and invalid and cannot be kept in place, negating the Supreme Court's ruling.

TANGLED WEB

The situation becomes even more complex as the GOJ is a significant 19 per cent shareholder in JPS. How could the Government be part-owner, lawmaker and lawbreaker all at the same time in the JPS electricity case? How could the GOJ want and need to break the JPS monopoly and at the same time appear to be, or be part of, preserving it? Where do the priorities of the GOJ lie?

Would it not be absolutely necessary to resolve these issues quickly, transparently and professionally as possible, so that the enthusiasm of the business interests which now want to invest in an energy industry in Jamaica be accommodated and kept at the highest level?

Here is where the Government of Jamaica and the JPS have to come to terms now with the situation facing us over the energy industry, as the Gleaner editorials regularly recommend, and the plans for its liberalisation and development.

JPS has every right, we imagine, to appeal the decision, but the evidence presented is overwhelmingly clear that the licence should not have been granted as it was and so an appeal could delay the process of completing the plans for the necessary upgrade and expansion of the JPS to be able to reduce the cost of electricity in a reasonable period of time.

The energy experts state that the JPS grid and accompanying 40-year-old generating plants have become defective and costly to maintain. It should take two to three years to retrofit the grid, which loses some 73 per cent of all the energy used and transmitted across the grid to generate electricity. Only 27 per cent reaches the consumer, who apparently pays proportionately for the 100 per cent used at source.

COULD PROVE CATASTROPHIC

The UWI energy think tank has recently shown us how critical it is to have the proposed 360MW LNG plant, costing US$614 million, properly considered, planned and engineered with all the necessary safeguards put in place. A mistake or failure in this operation could prove to be catastrophic for Jamaica.

CURE is clear that there is an enormous amount of work to be done to capitalise on the monumental Supreme Court decision of Justice Sykes on the eve of Emancipation Day and Independence Week, and, therefore, calls upon all consumers, civil society and energy organisations and the business community to make sure that the GOJ moves immediately, in dialogue and partnership with the JPS in particular, and all the international and local energy interests, to once and for all deal with the energy problem in Jamaica.

As Dr Michael Witter said, we are living in a new age where our habitat, the planet, is being threatened daily by global warming, an outcome of the indiscriminate overuse of fossil fuels, mainly oil, for generating electricity, driving industrial production and polluting the environment, all at the same time.

Everything is interlinked. The protection of our environment and the land to feed ourselves, to stay healthy and to sustain a tourism industry, to be employed and produce and managing this production and our economy so that we can move out of debt, poverty and towards development, prosperity and peace.

Solving the energy crisis and dramatically reducing the cost of electricity as fast as possible is one of the most important steps that must be taken now to restructure the economy and our activities in this direction.

Dickie Crawford is co-founder of CURE. Email feedback to columns@gleanerjm.com and richard.dickie.crawford@gmail.com.