JPS requests licence extension to secure funding for Melissa recovery

Permanent secretary in the Ministry of Energy, Carol Palmer, has revealed that the Jamaica Public Service (JPS) has asked the Government to extend its current licence, which expires in July 2027. The request, she said, is intended to help the light and power company secure financing for major restoration work in parishes heavily affected by Hurricane Melissa.

Palmer appeared before the Public Administration and Appropriations Committee (PAAC) on Wednesday to discuss post-hurricane recovery efforts.

She told the committee that JPS is seeking “wiggle room” to obtain capital, noting that the Government is already in discussions with the utility to support its search for financing. A submission on the matter was sent to Cabinet on Tuesday.

A senior official from the JPS told The Gleaner last evening that the company had “no comment” on the issues raised at the meeting.

PAAC Chairman Peter Bunting pressed Palmer on whether the funding sought by JPS was in the vicinity of US$500 million. Palmer confirmed that the amount was “close” to that figure, but said Cabinet would decide whether the details could be disclosed. She added that the ministry has asked the Office of Utilities Regulation to verify the company’s assessment of infrastructure damage.

St Mary Central Member of Parliament Omar Newell questioned whether the ministry’s ability to pressure JPS on key matters was weakened because Government had previously signalled that the licence might not be renewed.

Palmer responded that JPS has indicated it cannot attract the necessary capital with only three years remaining on the licence. Lenders, she said, are hesitant because the repayment period would extend beyond the expiry date.

Palmer stressed that an extension is not guaranteed. Any new or renewed licence would require JPS to accept new terms aimed at addressing long-standing concerns, including high electricity costs.

“We cannot step back on that – the country has been suffering from the high price of electricity and all the other things we have been talking about for years. And we have agreement, approval from the Cabinet to push for these changes,” the permanent secretary insisted.

Bunting also questioned whether the current urgency to restore power gives JPS greater leverage in negotiations. Palmer rejected that notion, arguing that the company still depends on government support to secure financing.

“That’s what they feel, but that’s not it, because if they are dependent on us to be able to secure financing, then we have the handle,” she said.

The Government is expected to begin formal talks in January on whether to renew or revoke JPS’s licence. A tender to hire a consultant for the process closed on October 30.

JPS currently holds an exclusive licence to distribute electricity across Jamaica, issued in August 2011 and set to end in July 2027.

edmond.campbell@gleanerjm.com