Election Questions on Energy

One of the biggest challenges facing businesses is the high cost of electricity especially to those companies involved in the area of manufacturing. It is thus important to understand the position of both parties in relation to the provision of electricity and energy. We need to know if there is a plan to be put in place to deal with high electricity costs in order to make our industries more competitive.

Our first question is “Are you committed to reducing Jamaica’s dependence on oil for energy production and what alternative energy sources will you pursue? Based on what is happening in the world economy it is highly unlikely that there will be a reduction in the price of oil. In fact most economists suggest that the cost of oil will continue to rise as developing countries increase their appetite for energy and that we could see oil prices in excess of US$200 per barrel. That price would effectively close down almost every operation in Jamaica and would lead to a situation of energy rationing. We therefore need to know the steps that the next government will take to address this situation. Failure to take action is not an option as this will lead to chaos and confusion.

Closely associated with this question is this one – “Are you going to adjust our import duty structure to be in line with your energy policy?” The days of allowing people to import whatever they want without regard to energy consumption are over. This country can no longer pay the cost of this policy as our ability to earn the much needed foreign exchange to buy oil is very much restricted. We would like to see alternative energy products being imported with no customs duty or better yet we would love to see them being manufactured here in Jamaica. Conversely I believe that items that consume large amounts of electricity such as SUVs, electric heaters, air conditioners, etc should attract an energy tax if imported into the island. This energy tax could then be used to help pay for oil imports or to develop alternative energy sources.

Finally I have two questions related to the JPS, firstly – “Will you allow other independent producers of electricity to attach themselves to the grid or alternatively permit them to distribute via their own grid?” This will allow some measure of competition to take place for those who might wish to challenge the monopoly position of JPS. Secondly – “Will you put in place regulations that will force the JPS to become more efficient and prevent them from passing on their inefficiencies to the consumer?” the biggest complaint is that there is no incentive for JPS to become more efficient as they are allowed to recover all of their costs. If restrictions were put in place then the company would be forced to reduce their operating costs.

Tags: energy, politics