Camilo Thame, Business Reporter

Jamaica Broilers Group is awaiting the completion of negotiations with the Office of Utilities Regulations (OUR) to press ahead with a power purchase agreement with Jamaica Public Service (JPS).

The deal could earn the agribusiness company an additional $50 million through the sale of electricity to the national grid.

Jamaica Broilers (JB) which paid US$3 million last year for a 90 per cent stake in a cogeneration - steam and electricity - power plant at Spring Village, St. Catherine, says it is now in a position to offer between one and two megawatts (MW) to the national grid.

In its annual report for the year ending April 29, 2006, Broilers noted that it had rebuilt a 5MW engine during the course of the year, "which now puts this operation in a position to consider entering into a power-service agreement with JPS, which would increase revenue substantially."

"Three engines were refurbished before to put total supply at 12.5 MW, where one 5MW engine could operate at any one time, with the others serving as backup," JB's senior vice-president of finance, Ian Persard, told Wednesday Business.

"We should be able to offer one to two megawatts," said Persard Tuesday during his trip to Brazil to shore up feedstock supply arrangements and potential markets for his firm's planned 60 million gallon $1.1 billion ethanol plant.

Supply agreement

JB has set no timeframe to tie down the supply agreement, saying "a lot depends on the negotiations with OUR."

The cogeneration operation, which supplies electricity and thermal energy to Best Dressed Chicken's processing plant, generated 16.1 million kilowatt hours (kWh) of electricity in excess of the poultry, fish and feed manufacturing firm's needs during the year, which was sold to JPS at 'dumped' energy prices, or at fuel cost.

Best Dressed is the brand under which Broilers markets its chicken and fish.

Wigton windfarm, a state-owned power provider that uses wind as a source of energy, has had a power purchase agreement with JPS since 2004.

Under the 20-year agreement, Wigton agreed to sell all the electricity generated at fixed prices of US5.6 cents per kwh for the first five years, and US5.051 cents per kwh for years six through 20.

Under similar terms, Wednesday Business estimates that Broilers could earn an additional US$800,000 ($52 million) should it deliver the same amount of electricity as the 2006 financial year.

For its full financial year to April 29, 2006, Broilers earned gross income of $9.94 billion, and netted $645 million.

The ethanol facility is expected to contribute significantly to the 50 per cent profit growth that the company projects over two years to 2008.

camilo.thame@gleanerjm.com