Jamaica Broilers Group has a plan to triple capacity at its power co-generation plant in St Catherine, with targeted investment of US$4 million to US$5 million (J$312 million to J390 million).

But Chief Executive Officer Robert Levy says the addition of another 10 Megawatts rests on the finalisation of a power purchase agreement with monopoly Jamaica Public Service Company, which manages the national electricity grid.

Broilers, whose main business is poultry, produces its own electri-city, but generates more than it needs to power its operations.

"Right now, we are producing five MW and we are selling to JPS and using some, and there is real potential of expanding that by another 10 MW," Levy told the Financial Gleaner.

But Levy said the expansion would not commence until he has a deal with JPS, which he hopes to finalise early next year.

No comments from JPS

"We have sent them a whole proposal, however I think they are also assessing (developments)," he said.

JPS chose not to comment, saying the relevant officer was unavailable.

"They might be looking at potential downturn in usage. So, they might be looking at when they are going to need the 10 megawatts," said Levy. "They have promised to get back to us pretty shortly."

dionne.rose@gleanerjm.com

These are the facts

THE EDITOR, Sir:

In the article “Broilers to triple capacity at cogeneration plant”, published in the Financial Gleaner , December 5, 2008, the Jamaica Public Service Company’s (JPS) response was misrepresented.

The reporter called on Tuesday to enquire about the nature of the contract between the JPS and Jamaica Broilers regarding the purchase of power from their new plant, and what price would be paid.

I was not able to immediately provide answers to her questions, but after speaking to the relevant persons in-house, I did call her back and told her that the JPS did not have a contract with Jamaica Broilers, and that the Broilers group should be talking to the Office of Utilities Regulation (OUR).

She then asked if we had had any discussions at all with Jamaica Broilers and I indicated that we had had preliminary discussions, but were not currently engaged in any regarding the project. I cannot see how this can honestly be represented as the “JPS chose not to comment”.

The facts of the matter are as follows:

At the moment, the JPS is not considering any proposal from Jamaica Broilers for provision of electricity from their proposed new capacity.

Jamaica Broilers did make a proposal to the JPS some months ago, but in a letter dated October 10, 2008, the JPS redirected them to the OUR, as the proposal was not in keeping with the regulatory framework within which we operate.

The OUR is responsible for setting the guidelines for new capacity development, which includes the pricing of power projects. Also, the regulator has responsibility for anticipating future power requirements and determining the best options that should be explored. In this regard, the OUR periodically issues requests for proposals (RFPs) as part of that ongoing process. Jamaica Broilers is free to respond to such requests from the OUR, but apparently chose not to respond to to the recent RFP issued by the OUR. The JPS has to be directed by the OUR before engaging in power purchase agreement discussions with any entity.

Winsome D. Callum

Head of Corporate Communications

Jamaica Public Service Company Ltd.

EDITOR’S NOTE : The Gleaner apologises for the misrepresentation and the inconvenience to Ms Callum and the JPS.