Susan Gordon, Staff Reporter
WINSOME CALLUM
JAMAICA PUBLIC Service Company Limited (JPS) increased its electricity generation capacity by 32 per cent at a reduced cost with the advent of the Jamaica Energy Partners' (JEP) new power barge in January of this year.
The Doctor Bird 2 should, according to head of corporate communication at JPS, Winsome Callum, lower JPS's fuel bill and reduce the fuel rate charged to customers. Terms of the generation agreement, were negotiated with JPS, JEP and the Office of Utility Regulations earlier this year.
Neither JPS nor JEP disclosed the details of the agreement, but the Financial Gleaner learned that JPS has received a 20 per cent reduction in the price of the electricity generated.
"The contract with JEP was approved by the OUR primarily on the basis that the overall renegotiated contract results in per unit cost reduction," Ms. Callum said. "However, we will not disclose our contractual rates with the IPP (independent power provider) at this time, "she added.
INCREASE IN RESERVE CAPACITY
At the end of March 2006, JPS increased its installed generating capacity of approximately 765 megawatts to 817 megawatts with the additional 50 megawatts generated by Doctor Bird 2. The 32 per cent increase in reserve capacity now gained by JPS is also in keeping with the Office of Utility Regulation (OUR) standards.
The 50 mega watt power barge docked at Old Harbour, St. Catherine, Doctor Bird 2 arrived in early January and became fully operational at the end of March after a series of tests by the owners, JEP. It was acquired at a cost of US$50 million (J$3.23 billion).
At the launch of Doctor Bird Two earlier this month at the JEP's plant in Old Harbour St. Catherine, Charles Matthews, outgoing chief executive officer of JPS, suggested that this extra capacity should reduce the likelihood of the national grid suffering power outages.
"More reserve power will be available to meet customers' needs in the event that there are unexpected problems on a number of generating units at the same time others are out of service for routine maintenance," Ms. Callum explained in a previous interview with the Financial Gleaner.
She said Jamaica's current peak demand for power is approximately 616 Mega watts. The enhanced new capacity of 817 megawatts thus provides an additional cushion in case there is any fallout in the system.
Thirty per cent of JPS's electricity is provided by independent power providers and JEP accounts for two thirds of this amount. The 10 per cent is generated from other independent suppliers including Jamaica Private Power Company Limited.
The contract to ensure that future generation expansion is done in the most cost-effective manner at JPS was given to JEP on an open bidding basis late in 2005.
Gas turbines, which run on expensive diesel oil, are generally used in peak demands by JPS.
Technical officer for JEP Wilfred Bassaragh told the Financial Gleaner that the barge system is far more cost efficient than the turbines.
"It also has the shortest implementation time, the cheapest capital investment that can utilise heavy fuel oil and convert to LNG, [liquefied natural gas]" he added.
Heavy fuel oil, produced as a cheap by-product at the Petrojam refinery, is one of the lowest cost feedstocks available locally.
