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I wish to advise the country that this morning in my capacity as Energy Minister, I wrote the Jamaica Public Service company (JPS) and gave formal notice of the Government’s intention upon expiration of the current all-island licence NOT to renew under existing terms.

My letter to the JPS was written pursuant to Condition 27 of the licence, which provides for the Government of Jamaica to acquire the licensed business at the expiration of the term of the licence—that expiration date being July 8, 2027.

It is not the intention of the Government of Jamaica to take charge of the operations of JPS. Prior to the expiry of the current licence in 2027, we intend to negotiate new licensing terms and conditions with potential investors which are favourable to the people of Jamaica.

My statement to the media at this time is intended to provide clarity and transparency around the Government’s objectives, the process that is underway, and to reiterate our commitment to securing better outcomes for the Jamaican people.

 WHY HAS THE GOVERNMENT DECIDED TO THIS PARTICULAR STEP?

Our country will recall that in 2001, the former PNP Government entered into an all-island licensing arrangement with the JPS.

Subsequently, the PNP administration further entered into a binding agreement to amend provisions of the 20-year all-island license.

I think we can all agree that the people of Jamaica have NOT been served well by the existing electricity supply arrangements. The terms under the current licence have yielded electricity prices which are amongst the highest in the region. The arrangements are deeply flawed and in need of significant reform.

The current juncture represents the first opportunity presented to the current administration of Prime Minister Holness to secure terms which better serve the people of Jamaica. We take this duty seriously.

This development where the Government of Jamaica has essentially formally notified the JPS of its intention to, at the expiration of the current JPS licence, not pursue renewal under the existing terms has come in the context of developments in the wider electricity sector where there has been a significant global reduction in the cost of renewables.

The Government of Jamaica is determined that consumers of electricity in Jamaica should be placed in the best position to benefit from these developments. The current licensing arrangements with the JPS do not provide sufficient incentives to bring renewables onto the grid at scale, and they provide for generation via imported fossil fuels, which is not cost-effective. It is time for reform.

As we negotiate a new licence, the Government is determined to extend every effort to put the people of Jamaica in a position to take full advantage of possibilities to reduce the country’s energy bill and to reduce the cost of electricity to Jamaicans. Improving Jamaica’s energy security and achieving decarbonisation goals are also among our key objectives.

WHY NOW?

The current JPS licence is approaching the end of its shelf life. This is the first opportunity presented to the current administration to negotiate real changes which benefit our country and its people.

The action I have taken today, on behalf of the Government of Jamaica, in giving formal notice to the JPS of the Government’s intention to acquire the licensed business at the expiration of the term of the licence, is a step towards achieving the change which our country demands.

An alternative would have been to attempt to renew the existing licence on its current terms, which would risk maintaining the flawed status quo entered into by the former administration and put Jamaica at a distinct disadvantage. The Government of Jamaica does NOT believe pursuing such a path is either appropriate or viable at this time.

The step taken by the Government of Jamaica today is reflective of the success of the administration over the past nine years in placing our economy on a stable footing and making the current climate conducive to investment. Indeed, we are in a position to, on behalf of the people of Jamaica, pursue significant reform to the energy sector in a bid to secure better and more affordable outcomes for the people of Jamaica.

WHAT’S NEXT?

The formal notice given to the JPS will give the government the remaining two years of the existing JPS concession to implement holistic change through the development of a long-term plan to create a modern and efficient electrical power system, which is more dependable and creates a sustainable pathway towards lower electricity prices for Jamaican households and businesses.

Even as we are determined to negotiate a more reasonable licensing arrangement and an agreement, which serves our country well, the Government of Jamaica is open to exploring expressions of interest from all parties which may be desirous of acquiring the new licence, including the current licensees.

However, the terms of the new arrangement must be consistent with the Government’s primary objective of reducing the country’s energy bill and securing more reasonable and affordable electricity costs for Jamaicans.

The current licence holders are well aware of the Government’s intention to negotiate new terms which are consistent with the vision of the Government for a reformed energy sector.

The terms must be the collective goals and aspirations of the people of Jamaica, who have been burdened by high electricity costs for decades.

STABILITY

Reform in the energy sector is a must. Even as we pursue the pathway towards reformation, I wish to assure the nation that the Government’s serving of formal notice to the JPS of its intention to acquire the licensed business augurs well towards stability in the electricity sector, even as we negotiate terms which better serve the people of Jamaica. There will be no disruption to service delivery prompted by our move to put ourselves in a position to secure better outcomes for consumers.

There is a well-known quote which says—insanity is doing the same thing over and over again and expecting different results. This Government is committed to positive change.

The announcement I made earlier was arrived at following extensive deliberation and consultation with industry experts and consultants.

It is part of a transformative move by the Government to pivot towards achieving more sustainable and feasible outcomes in the energy sector. We are committed to reducing the cost of electricity in Jamaica.

As we consider the future of our energy sector and the terms under which a new JPS licence will be governed, this administration of Prime Minister Andrew Holness will NOT enter into arrangements which do not provide a framework for positive reformation of the energy sector. We fully intend to deliver real and sustainable results for the people of Jamaica.  Thank you.