CURE urges consumers, experts to ensure gov't deals with energy problem

Richard Crawford

Saturday, August 11, 2012

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Supreme Court Judge Bryan Sykes made a landmark ruling that the JPSCo licence was indeed an illegal and invalid one, in the case brought by Citizens United to Reduce the cost of Electricity (CURE) and claimants Betty-Ann Blaine, Dennis Meadows and Cyrus Rousseau.

This ruling has had far-reaching positive impact in Jamaica, showing that we can contest injustices in the courts carried out even by powerful monopolies, and which are not beyond the rule of law. Already, the overwhelming support from all sectors of society is showing this to be so.

The claimants contended that the licence given to the JPSCo in 2001 was an illegal, exclusive monopoly one as it breached the Electricity Act which neither allows for monopolies nor gives any minister of government the authority to issue such a licence for the exclusive transmission and distribution of electricity in the country.

This ruling comes after years of suffering by customers of the JPSCo which was able to use their monopoly power to great advantage to secure a minimum rate of guaranteed profits, as well as to disregard the problems of consumers. This was made even worse as the Office of Utilities Regulation seemed to regularly support transgressions of the JPSCo.

The ruling by Justice Sykes has legally and incontrovertibly opened the door for the government to move now to renegotiate the licence for the JPSCo, paving the way for a new, competitive energy regime 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 at US41c per KWH which is one of the highest rates in the world, and that approximately 1/3 of our current budget goes to buy oil.

So the issue of the cost of energy and the resultant uncompetitive nature of our industries dominated a Department of Management Studies and JUSD economic forum at the UWI on July 30 where Minister of State Julian Robinson indicated that it is the single greatest priority of the government to settle now the case of new, affordable energy for Jamaica in partnership with JPSCo 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 JPSCo has a valid licence to operate, but not exclusively, nor in a monopolistic fashion. Further, that the JPSCo may be considering appealing against the Supreme Court's "decision that its exclusive licence is not valid". As far as CURE understands, the JPSCo had one licence which CEO Kelly Tomblin says the company bought as an exclusive licence. 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.

In any case, CURE's attorneys, Hugh Wildman and Taylor-Wright & Co, who represented the Jamaican consumers, are confident that any appeal by JPSCo will be unsuccessful. In fact, they are already examining possible measures for compensation to JPSCo's customers for treatment encountered since 2001 under the illegal monopoly operation.

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

The energy experts state that the company's grid and accompanying 40-year-old generating plants have become defective and costly to maintain. 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 because a mistake or failure in this operation could be catastrophic for Jamaica.

CURE knows that these are the priorities and work to be done to capitalise on the monumental Supreme Court decision of Justice Sykes. We therefore call upon all consumers and energy experts to make sure that the GOJ moves immediately, in dialogue and partnership with the JPSCo in particular and all the international and local energy interests to deal, once and for all, with the energy problem in Jamaica.

Richard "Dickie" Crawford is co-founder of CURE.




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