No decrease in water bills expected due to NWC energy savings

Derillion Energy Jamaica CEO Simon Piggot (left) explains to officials how the Mona Reservoir Floating Solar System works.

WHILE the cost of energy needed to produce drinking water is expected to drop by around $1 billion a year, National Water Commission (NWC) customers should not expect reductions from their short-term bills, as the government wants to use the savings to tackle critical infrastructure and supply issues that have plagued the utility provider for decades.

Savings from the recently commissioned 45 megawatt peak floating solar project at Mona Reservoir in St Andrew are anticipated through reduced evaporative losses at the reservoir and reduced need to treat algae buildup. The system should also provide some stabilization for the Jamaican Public Service (JPS) 20 megawatts per hour of battery storage energy for up to nine hours a day.

Presenting details of the project to the Senate on Friday and answering questions from Opposition Senator Peter Bunting regarding the pass-through of benefits to NWC customers, Government and Cabinet Senator Matthew Samuda pointed out that when the monthly energy costs of the NWC increased to more than $1 billion earlier this year, those increases have not been passed on to customers. “What has been affected are projects that needed to be done and which we can now only implement for supply, as prices have generally stabilized in recent months,” he said.

He pointed out that the Mona Reservoir floating solar project would help start the process of resolving some of the legacy financial issues that the NWC has struggled with for decades.

“There is a possible benefit that is coming in terms of price for people who pay for water, but the decision is whether or not the money should be invested in connecting the 22% of citizens who do not have no connection whether it should be spent on reducing the debts and inheritance issues that have plagued the institution, or whether or not it should be a mere passing I think it should be spent on connecting citizens and upgrading infrastructure that is not fit for purpose in 2022,” Samuda argued, stressing that the reservoir project offers an opportunity to address infrastructure issues.

He said the project would not result in a short-term reduction in bills, but would save the NWC from having to apply to the Office of Utilities Regulation (OUR) for rate increases: “We have weathered the energy storm at the start of the year without taking those increases, it gives us the opportunity to put the systems in place that we’re unlikely to have to have increases anytime soon.”

In April, the OUR granted an 11.7% hike in NWC’s base Price Adjustment Mechanism (PAM) tariffs, which the regulator said had no further impact on monthly bills client.

The 45 kilowatt floating solar project, which the government commissioned in September, is being implemented under a $62.4 million investment deal with Derillion Energy Jamaica Limited, Aten Group and REIL Energy Investments Limited.

Bunting said the opposition welcomed the multimillion-dollar initiative, but said it raises broader political issues that will affect poor consumers, due to the growing number of heavy commercial and residential consumers turning away of the JPS network, opting for less expensive energy sources. .

“What will happen if your best residential or business customers go off the grid? [is that] JPS overhead will be allocated on a smaller basis, so the cost per kilowatt-hour will increase. This will create pressure from below as the poorer consumers of JPS who are now struggling to pay their bills, it will become unaffordable for them,” he argued, adding that in the long run the big consumers such as the NWC continue to reduce their consumption.

Bunting pointed out that while this won’t become an immediate issue, it should be carefully considered as it could lead to excessively high rates for the average customer.

Samuda said there must be an orderly transition to renewable energy, which incorporates potential increases in distribution costs, to ensure a net decrease in costs, while meeting environmental obligations. “You almost have to invest in and deploy renewable energy that gives you cheaper energy, faster than distribution space increases,” he said.

He added that even with larger customers leaving the JPS network, there is still marginal growth in its customer base, indicating the start of the country’s transition to electric vehicles, which will provide more opportunities for stability in the market. energy market.

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