Paulwell’s Damascus Moment: “Re-nationalize Electric Company”

A most auspicious moment has arrived for Jamaica, and like the natural mystic spoken about by the Hon. Robert (Bob) Nesta Marley, it is blowing in the air … and if you listen carefully you will hear. I hear it, do you? If not I will tell you!

For many years I was like John the Baptist, minus the lion cloth, preaching in the intellectual wilderness of Jamaica , “Renationalize the Jamaica Public Service Company (JPSCo), as the only way to modernize one of Jamaica ’s premier (electricity generating and distribution) assets.” And like the Biblical John, I was lampooned as a blabber-mouth, not a half idiot but a full one and even with more picturesque adjectives ,as only our patwah can deliver( you are allowed to use your imagination here).Yet undaunted ,again reminiscent of the Biblical John, I am still at it even to this day some 10 years later!

A staunch protagonist then was the erstwhile Minister of Energy, the Hon. Phillip Paulwell, now Opposition Spokesman on Energy and a Energy Consultant (notice everybody and their cousins are energy consultants/experts nowadays in Jamaica). It was his administration in need of what is loosely called “budgetary support”, which sold the JPSCo to a foreign investor, for a measly US$200 million. Since then Jamaicans have seen an inexorable rise in electricity rates, while the initial investor has sold the asset for US$800 million and merrily went their way.

Even now the beleaguered Jamaican people are under threat for another round of rate increases! What to do? Well why not renationalize the JPSCo. Sound familiar? But now we have as an ally none other than Paulwell, the former minister, like the Biblical Paul, having had his road to Damascus experience. He has stated publicly, that renationalization of the JPSCo is an option. When pressed by the stunned reporter, the ex-Minister of Energy and current Opposition Spokesman on Energy as well as energy consultant/expert ,opined that he has had a change of mind given that he has had two years of unfettered time to think about it.

This is good… you have all heard the Proverb of “better late than never”. Welcome Brother Paulwell into the company of those of us who love Jamaica more than cook food and salivate at its yet to be fulfilled potential, of which glimpses are seen, lately exemplified by our athletes. With this new ally, let me here again make the case for the renationalization of the JPSCo. There is indeed a natural mystic blowing in the wind…

First, rightly thought through, the owners of JPSCo have themselves made the case for us. They claim that to modernize the electricity sector they would need to spend US$1 billion and the existing rates would not be sufficient to recoup their investment and provide for a reasonable return on their investment. On the other hand if we renationize the asset we would also have to retool and modernize but without the incumbent rate increase as the gain in efficiency will more than offset the high cost attributable to low efficiency, obsolete plants (recall JPSCo’s efficiency is about 20 per cent, meaning that 80 per cent of the bought and paid for oil used in the plant never gets converted to electricity, but heats up the Caribbean Sea, as if we need to heat up the Caribbean anymore than naturally obtains!!)

Not only will the increased efficiency of a modern electricity sector pay for the capital investment, but also for any financing we may undertake to accomplish this end, as presumably we would have to borrow the US$1 billion ! Or do we? Certainly not! The modern arrangements would be for Jamaica , as a nation, to own the transmission and distribution networks only, while the generation elements are privatized.This would bring in substantial private investments and reduce substantially the nations financing needs.

Privatizing the generation elements not only makes financial sense  but geopolitical sense as we silence the critics who fear the “socialist bogeyman”, entering by the back door. Secondarily, the case must  be made that a modernized electricity sector will not look anything like the present sector. Pardon me here if I too sound like an energy expert/consultant, but having but glimpsed the future, a modern plant is going to be an “energyplex” , producing various valued added products like fuels, specialty chemicals and electricity. They are to be located close to their energy sources whether wind, biomass, solar or even garbage (waste to heat systems). While our transmission and distribution networks are scaled down to mini and micro grids (smaller is indeed better).

All this is eminently doable; is technically feasible and the international political and financial climate favorably disposed. What is lacking in the corridors of power in Jamaica is the vision! It was lacking under the previous administration, albeit quite inexplicably, recall, it was the same Minister Paulwell who must be credited with the modernization of Jamaica’s telecommunication sector .Such that I can send this correspondence from deep rural Manchester, with nary a telephone wire to be found within a 40 mile radius and some remember applying 40 years ago (now with the ubiquitous cell phones who cares, this is called leap frogging). Let’s hope the new Energy Minister Hon. James Robertson can do for Jamaica ’s electricity sector what Mr. Paulwell has done for telecommunications or the Jamaican people might just have to return Paulwell to finish the task, now that he has had his road to Damascus experience.

Trevor (EnergyMan) Bogle
bogle108@yahoo.com

     

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