Jamaicans are likely to not see any price reduction in electricity rates come 2016 – Part #3

Next I decided to look at the cost of provision of electricity if EWI had to use Heavy Fuel Oil (HFO)

	USING HFO
Installated Capacity (MW)	434
Rated output (MW)	399.28
Uptime	0.85
# Days	365
Projected Run hrs	7446
Total Generated power (MWh)	2,973,038.88
Plant Rated Eff  (CCGT)	30%
Average Heat  Rate  (MMBTU/GAL)	149
Total volume of  HFO Req(GAL)	62,693,209
Tonnes of Fuel Required	735,688.51
Ave Cost HFO US$/ (Tonne )	575.75
Total Fuel Cost /Annum	$      423,572,659
Fuel cost as % total cost	85%
O&M	15%
Est total annual cost (Sub total)	$      498,320,775
Fuel Cost / KWH	$                0.1676

Interest payment	$        46,423,768
Total Annual Cost Incl Int Pay	$      544,744,543
Cost per Kwh	$                0.1832
EWI stated cost per KWH

ROI > 6.6%( After tax)	$62,390,000.00
Tax Rate	$  93,538,230.88
EBT based on 33% Int rate
Total Generation Cost	$      638,282,774
to meet roi
Sale Price to JPS	$                0.2147

Assumptions ( Best Guess)
Plant Est Cost	$       734,000,000
Loan amount	$       600,000,000
Ave weighted cost of borrowing	6.60%
Length of loan yrs	30.00
ROI > 6.6%( After tax)	8.50%
Tax Rate	33.30%

Additional Info

Lets assume EWI runs the plant 80% of the time on LNG and the remaining 20% on HFO then the cost of lowest possible sale price to JPS is as stated below.

Weighed Ave  US$Cost/Kwh ( to JPS)

$                        0.1769

Now this is NOT the final price to the consumer , so those who have been championing electricity rates of $0.18 – $0.20 to the consumer appears to be talking hot air.