Jamaican OUR regulation policy supports net billing


Kingston, Jamaica — (METERING.COM) — July 8, 2008 – The Jamaican Office of Utilities Regulation (OUR) has taken note of the increasing interest being expressed by residential and small commercial customers of the Jamaica Public Service Company (JPS) who produce electricity for their own needs, particularly from solar voltaic, to sell their excess power to the national grid.

Over the past few months, several JPS customers have written to the utility company indicating an interest in supplying electricity to the grid. This interest is driven by the current high cost of electricity and was precipitated in part by the OUR’s published Regulation Policy for the Addition of New Generating Capacity to the Public Electricity Supply System.

The regulatory policy allows for the addition of small power producers of 100 kW capacity and less to be made to the system by way of a Standard Offer Contract issued by JPS. This contract would, among other things, address the tariff structure, the rights and responsibilities of the parties, safety, the technical requirements of the facility and the assignment of interconnection costs.

The regulatory policy specifies net billing which utilizes a two meter system, as opposed to net metering which requires only one meter as the method of interface to the grid. Both mechanisms involve selling excess generating capacity to the grid; however, in the simplest terms, the difference would be the price at which JPS buys the excess.

In net billing, JPS would buy excess power from its customers at the ‘generation avoided cost’, plus a premium (currently set at 15%) if the source is renewable energy. In the case of net metering JPS would buy excess power from its customers at the same rate at which it retails to customers.

The OUR is of the opinion that while the system of net metering is utilized in some countries, in Jamaica there is a probable breach of the provisions of the Licence currently granted to JPS if such a system was mandated. In any event, this issue is best addressed through government policy, particularly via the Green Paper on Energy which is currently at the stage of public consultation.

In the meantime, the Green Paper on Energy notes that the Government will encourage the development of a domestic industry for the production of electricity from renewable energy technologies, including solar, with a view to increasing the contribution from renewable energy sources from 6% to 10% by 2010 and to 15% by 2020. The Green Paper also indicates that tax policies will be designed to encourage the development of the renewable energy sector and that the local financial sector will be encouraged to provide funding.

The OUR notes that some concern has been expressed with regard to the effect of power from these small distributed renewable energy systems on the stability of the JPS grid. It is, however, of the view that it would take a significant number of these very small customer interconnections to create a stability problem of any consequence for the JPS system at this time.