JPS to invest J$5 billion to reduce power cuts
Published:Wednesday | January 26, 2011 | 12:00 AM
The monopoly light and power distributer, Jamaica Public Service (JPS), has said it is planning to spend another US$61 million (J$5.2b) to further rehabilitate and modernise its transmission system, the goal being a reduction in power cuts.
The company has set a target of 35 per cent reduction in disruptions within four years.
According to Chief Executive Damian Obiglio, the efficiency improvement, loss reduction and upgrade investment is on top of the US$491 the company already spent over the last 10 years beefing up transmission and distribution.
"Our transmission-reliability programme will cost J$28.5 million, while we will invest another US$32 million in maintaining distribution," he said, adding that this amount represented almost 50 per cent more than the previous budget.
The expenditure programme, said Obiglio, was part of its commitment to improving service delivery to its consumers.
"Over the next four years, JPS will reduce interruptions by 35 per cent," Obligio said at a press briefing this month.
The power company is also setting aside US$30 million each year up to 2014 to ensure users are legitimately connected to its system, and while electricity demand has declined since 2009, Obiglio said, his company would, nevertheless, inject US$60 million each year to satisfy an expected upswing in demand.
The planned big spending is not being financed from JPS' own coffers, but from US$500 million the company is borrowing. The lenders include the Japanese Nippon Export and Investment Insurance, Citibank of Japan, the World Bank's International Finance Corporation and Export Development of Canada (EDC).
"All these loans we sign up for, will cost below eight per cent per year, which we can transfer to customers in lower rates," Obiglio said.
The assets of the company are valued at US$811 million while its debt stock stands at US$389 million.
JPS produces 68 per cent of the electricity consumed locally, while four smaller firms supply the remainder under power purchase agreements with the utility, which manages the national grid.
Obligio reported too that consumers have been using electricity more efficiently with consumption falling from 172 kilowatt hours per household in 2008 to 164 kwh per household in 2009, before jumping back to 171 kwh last year.
With the price of oil on the world market continuing to rise, the JPS CEO is calling for customers to intensify conservation.
The electricity regulator, Office of Utilities Regulation, Obligio said, has mandated a 2.7 per cent reduction in the cost of electricity each year.