On the second day of the Jamaica Chamber of Commerce's National Economic Forum "Pluggin into Downtown" last week Thursday afternoon, both of the Jamaica Chamber of Commerce's keynote speakers on the sub theme "The Economics of Energy", Ireland's former Director General for Energy, Tom Reeves, and Member of Parliament and Opposition Spokesman on Energy, Science and Technology Philip Paulwell (himself a former Minister with responsibility for energy) called for the full liberalisation of the electricity market in Jamaica.
Ireland's former Director General for Energy (the equivalent of Jamaica's OUR), began his presentation by stating simply that there should be "no monopolies", neither public nor private, as they are all "bad news".
cited the example of Ireland, where the European Union
had driven the deregulation of the energy sector over a decade ago.
This included not only generation, where there were now nine suppliers competing in a fully free market, but also vibrant competition between three retail distribution companies, delivering a real choice to the consumer, the only way to truly get customer service.
In Ireland even ordinary customers have the ability to switch suppliers with little more than a phone call, said Reeves
observed "choice is essential" and that for competition to be effective, switching suppliers "has to be like going to a supermarket".
Only the actual transmission lines themselves are a "natural monopoly".
In terms of overall recommendations, he
noted that an "independent" regulator needs to set "clear performance targets", unbundle networks, and move the risk of energy prices to where it belongs and can be managed, namely the utility and not the retail customer, who cannot manage the risk.
argued, like other panellists, that having the utility bear the risk also meant that it is the utility and not the government that should be making the decision over the choice of fuel, and that not taking a decision was itself a decision.
Former Minister Paulwell advised that energy was the most critical issue facing the country, as what was the "lifeblood of the economy" was far "too expensive" making Jamaican industry unviable, and, as a consumer "I feel it every day".
Citing the example of his
successful deregulation of the telecoms sector "People speak of JPS as they used to speak of Cable and Wireless - confused", he
observed that he
had first proposed the dismantling of the monopoly on transmission and distribution of electricity in his
budget presentation of June 23rd 2009.
Like other panellists, he
believed energy should not be a political issue, and there was no role for the government in determining fuel sources, which should be left to the private sector.
Paulwell also observed that he
was confident that private sector suppliers would rush to the Jamaican market due to its high prices, and that the recent bidding process did not attract bidders because of the unfair landscape.
observed that in any liberalisation process, there were good models and bad models, and that it was in Jamaica's capabilities to achieve a good model with a strong efficient regulator.