Editorial | Energy reset now

It would be denying the obvious to claim Jamaica’s energy sector isn’t mired in controversy or lacking clarity in its direction.

Last week, the Office of Utilities Regulation (OUR) advised peeved consumers that they will have to pay seven per cent more for electricity they consumed in November, partly because the power distributor, Jamaica Public Service Company (JPS), and its independent power suppliers, in the aftermath of Hurricane Melissa, had to use more expensive fuel, rather than natural gas, to fire up their generators.

At the same time, there are misgivings over the government’s decision to lend JPS US$150 million to help the company fund its post-hurricane reconstruction project, without any clarity on how the company will raise the rest of the finance, or even how much is needed.

Meanwhile, there is uncertainty whether JPS, with its current majority owners in place, will still be a power generator and monopoly operator of the transmission and distribution grid in 18 months when its current licence expires.

The government and the company are currently negotiating that matter.

However, the sense is that, at least prior to the hurricane, the government would have preferred the company to go. Now, it is the JPS’ owners, one of them at least, who appear not to be keen on staying.

These are critical national issues that highlight, not just technical weaknesses, but deeper institutional fragilities in how the energy portfolio is governed. In the circumstances, it is urgent that the government takes stock. It should recalibrate its posture to the energy sector in general, and the negotiations over JPS’ future in particular.

To state it baldly, there is a need for policy coherence and transparency and a sense that all parts of the government are working together and are in sync on the energy question – energy backbone for recovery and growth in the economy, which will decline by over four per cent this fiscal year, after Hurricane Melissa, a Category 5 storm, slammed into western Jamaica on October 28, leaving damage estimated at between US$8.8 and US$10 billion.

NEGATIVE IMPACT

This, when the lights go out, economic activity stalls, hospitals strain, water systems fail, and households are reminded of the country’s vulnerability. Moreover, with the pre-hurricane price hovering close to US$0.40 cent per Kwh, Jamaica has among the highest electricity prices among its regional peers, which is blamed among the reasons for the uncompetitiveness, and ultimate retreat, of the island’s manufacturing sector.

In that context, emergency financing to restore power ought not, in itself, to be controversial. What is causing the problem is the lack of transparency, fragmentation, and the sense that critical decisions are being taken without a clearly articulated strategic framework that the public and Parliament can interrogate.

Which is unfortunate. For, Jamaica’s energy challenge is becoming more complex by the day, requiring public trust and confidence to navigate – at precisely the moment when these face a threat of erosion.

On paper, Jamaica has an energy policy. The Integrated Resource Plan (IRP), renewable energy targets, and regulatory reforms provide a useful foundation for stakeholders to act. Yet, recent events demonstrated the need for more than a framework. Policy without strategic coherence and institutional capacity breeds confusion under stress. On both counts, the energy sector is showing serious weaknesses that need attention.

The loan to JPS became a lightning rod because it sits at the intersection of several unresolved questions:

• Who ultimately bears climate risk in Jamaica’s energy system – the utility company, the government, or the consumer?

• Under what conditions should public funds be used to support a private monopoly in times of crisis?

• What safeguards ensure value for money, transparency, and accountability?

PUBLIC DISCOURSE

These are legitimate questions for which the public needs answers. Yet, the public debate has been dominated by partial disclosures, shifting explanations, and political exchanges that generate more heat than light.

This is symptomatic of a deeper capacity problem. The energy portfolio has grown vastly more complex, while the state’s coordinating machinery and personnel have not kept pace.

Managing today’s energy system requires expertise in climate finance, infrastructure resilience, regulatory economics, geopolitics, and disaster risk management – all simultaneously. No single ministry can realistically carry this burden. And each ad hoc financial intervention by the government, however justified, chips away at public confidence when explanations are incomplete or delayed.

The controversy also exposes the need to revisit the national energy strategy to ensure that there is a clear ranking of priorities and assigning of responsibilities. If Jamaica had an agreed framework stating, for example, that grid resilience is a public good while generation risk remains private, then emergency loans would be easier to justify, structure, and explain. Instead, such decisions are made in the fog of crisis and then debated after.

The JPS licence negotiations magnify what is at stake. The licence should not become a substitute for strategy, nor should it be asked to resolve every unresolved tension in the system. Without strategic clarity, that is precisely what will happen. Resilience obligations, renewable integration, affordability, and accountability will all be squeezed into a single contractual instrument, increasing the likelihood of future disputes and public mistrust. In this scenario, national competitiveness, on which long-term growth and development rest, will be elusive.

What is required now is not verbal escalation but institutional reform: clearer protocols for emergency financing; pre-agreed transparency standards; and a public articulation of who carries which risks in a climate-changed world.

Energy must be treated as a national resilience project, not a series of episodic crises.