EDITORIAL - It's more than electricity theft

Kelly Tomblin, CEO of the Jamaica Public Service (JPS) Company, may have been bit a melodramatic. For thieving electricity consumers, as draining as they are on the company, and as difficult as they make her life, mask the larger problem faced by the light and power provider - and Jamaica.

For electricity theft in Jamaica is symptomatic of more fundamental issues, among which are the Government's failure to advance and implement a clear energy policy; its 'outsourcing' of elements of its social welfare programmes; and the JPS's own failure, over a long time, to adequately invest in the technologies to allow it to operate as efficiently as possible in a market it says it wants to be in. Which, of course, doesn't derogate from the facts presented, or the logic of the argument advanced by Ms Tomblin last Friday.

JPS's inability to adhere to agreed debt-to-earnings ratios potentially imperils its relationship with its lenders and could, as their auditors pointed out in their review of its 2012 accounts, present a risk to the company "as a going concern".

Reducing the 14 per cent of electricity that is stolen would be an inherently good thing. It would enhance the viability of the power company, as well as ease the burden on those consumers who now pay.

But there is another pertinent matter which the Government and the JPS must address squarely. The estimated US$30 million, or nearly J$3 billion, lost to the thieves is a sum inflated by policy failures and inefficiencies. Faced with this fact, a serious government would end the dithering over what fuel is to be used to generate electricity, as well as conclude the becalmed bids for new power plants. Nothing, though, gives us confidence that this will be the case.

Cheaper fuel is essential

The fact, however, is that the electricity produced from expensive oil at US 41 cents per kWh is unviable for Jamaican firms and domestic consumers. Cheaper fuels and modern power plants are essential. Procrastination by the Government in giving policy directives on the former, and JPS's failure to act on the latter when that was in its purview, helped to create today's crisis.

Further, Jamaica's perennially weak economy, with its high rates of joblessness and underemployment, means that electricity, at its real cost, is beyond the effective demand of many consumers, who nonetheless have expectations of it. So, they steal it and have, in the process, been enabled by the Government, as was all but admitted by Roger Clarke, the agriculture minister, in relation to whole communities on sugar estates that were allowed to tap into government entities for their electricity.

This is, at once, reflective of a kind of blind-eye social welfare and a breakdown of law and order. Theft becomes normal. Attempts to break the cycle often erupt in violence.

It is obvious that Jamaica must get on with the policies and projects that will lower electricity tariffs. The Government, too, must have the will to address the thievery.

It is also in the JPS's interest to invest in the smart technologies that make the stealing of the product difficult.

These are the kinds of things that firms sometimes have to do to survive in a market. And sometimes are made to do as monopolies in regulated markets.

The opinions on this page, except for the above, do not necessarily reflect the views of The Gleaner. To respond to a Gleaner editorial, email us: editor@gleanerjm.com or fax: 922-6223. Responses should be no longer than 400 words. Not all responses will be published.