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Raymond Silvera, deputy director general at the Office of Utilities Regulation.

Ross Sheil, Staff Reporter

There have been no takers for licences on offer to individuals to sell electricity to the national grid, a month after the Office of Utilities Regulation (OUR) published guidelines for net billing.

Raymond Silvera, OUR deputy director general, suggested the lack of interest may be linked to the price offered, saying that at the quoted rates net billing was not economically viable.

But calls to renewable providers also indicated that few knew the option had been introduced. And the Jamaica Public Service Company (JPS) itself is saying there were still details to work through with the regulator.

"At this time, JPS and the OUR are still finalising issues related to interconnection, technical standards and pricing," said Winsom Callum, JPS head of corporate communications.

Silvera said he expects a conclusion of those meetings and, pending agreement, the issuing of another paper on net billing within two weeks.

JPS sells electricity at about 23 US cents per kilowatt/hour to residential customers, but proposes to buy from net billing licencees at much lower prices of five US cents per kWh for long-term contracts and nine US cents for persons/ entities who sell to the grid on a per-month basis, said Silvera.

The prices reflect a 14-19 cent differential. The guidelines and application forms are available on the OUR website www.our.jm.com.

Renewable energy producers who opt on to the net billing programme will get a 15 per cent premium on the proposed 5-9 cents price, in line with the national energy policy's target to boost alternative energy supplies to 15 per cent of capacity by 2015.

But even then, such providers are still not price competitive against the larger more energy-efficient plants of JPS and commercial independent power producers.

For renewables like wind and solar to be viable, said Silvera, producers would have to slim their generation cost by at least 20 per cent, or one-fifth, to compete against fuel.

"We are at step one; we are not really at the point at step two where we can start selling as a nation to JPS," said Silvera.

"At this time it makes far more sense to be using technology to replace your existing bill rather than selling to JPS at the current price."

Net billing licensees would essentially become competitors of the monopoly power provider - the kilowatt hours it buys akin to a drop in market share - with Silvera suggesting that the low price to sell into the grid was an attempt by JPS to limit the competition.

Producers of renewables in Jamaica had suggested about three years ago that government introduce net metering, allowing for households and commercial enterprises to inter-connect with JPS.

Net metering, which Silvera said is frequently confused with net billing, puts electricity back into the national grid, turning meters backwards.

Customers are billed if their consumption exceeds supply to the grid, or credited when supply exceeds use.

Silvera said the tariff structure and terms of JPS' licence limits currently limit net metering as an option, saying it could affect their commercial operations.

"We decided that net billing is the policy that we would adopt although that doesn't preclude us from adopting that at a later date," he said.

"The problem with net metering is that you will really be (at current generation costs) passing on costs to the the consumer," he said.

Advocates of net billing said government policy would need to change policy to offer up incentives that encourage people to sell to the national grid.

Under the current structure, the price they sell at to JPS, they feel, would amount to small players subsiding a big energy corporation.

"For us, net billing does not make that much financial sense, but perhaps with Mirant pulling out that might give an opportunity for a revision of the policy," said Ava-Gail Gardiner who was part of a group shortlisted by the World Bank for US$200,000 to fund a micro-hydropower project to serve a community of 500 persons in Cascade in the Blue Mountains.

Insufficient incentives

Jason Excell, Managing Director of Appropriate Technologies and treasurer of the Jamaica Solar Power Association, believes that net billing, unlike net metering, does not offer sufficient incentives.

"You want people to in affect become small utilities, but billing means nothing to normal people, unlike metering," said Excell.

"In offering net billing, you are cutting out the individual who wants the credit. Why would you spend money to put electricity only to buy it back at a greater cost?"

But with the targeted US$25 million Energy Fund to become operational next month, atop GCT and import duty exemptions granted for 30 energy-saving and renewable energy products, government is doing its part, maintains Phillip Paulwell, Minister of Industry, Technology, Energy and Commerce.

While acknowledging that he may need to look over the figures, Paulwell said confidently that net billing would achieve its objectives.

"People are going to gain because they are going to be selling their over-production, which is the reason for net billing," said the minister.

"It's an opportunity for them to provide for themselves and to sell."