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PRINTA dozen oil suppliers have responded to the V.I. Water and Power Authority's most recent invitation for bids to supply No. 2 fuel oil for power production in both districts, the utility announced Monday.
The response was substantially greater this time around than when WAPA first issued the bids invitation in March, which netted only a single response in April.
The utility was forced to seek a new fuel supplier after the current provider, Hovensa, announced in January it would cease refinery operations on St. Croix and would no longer supply fuel oil to the utility after June 30. Hovensa later offered an alternate option to deliver fuel oil at discounted rates until the end of the year.
When WAPA issued the first request, it was in the process of preparing its annual invitation to bid for fuel oil to which Hovensa traditionally has been the most responsive bidder.
Only one company, New York-based Atlantic Petroleum Trading Ltd., responded to the original request for bids by the April 10 deadline. WAPA Executive Director Hugo Hodge later said the authority had looked into the bidding process and concluded bidders were discouraged by the likelihood of competing with Hovensa's discounted fuel rates.
The utility will seek delivery of as much as 80,000 barrels per shipment based on generation needs in the two power plants. Delivery will begin no later than Dec. 1. The agreement will be for one year and can be automatically renewed by the parties for another nine months.
In a WAPA statement, Hodge said the utility’s management team and technical and legal consultants have begun evaluating the bid proposals and will start interviewing companies next week to determine a short list of potential suppliers. Companies positioned on the short list will then be scheduled for negotiations.
Hodge said that WAPA expects to complete negotiations and make a final decision for a fuel oil supplier by the beginning of October.
Bid responses were received from the following 12 companies:
- Vitol Inc., Houston, Texas;
- Novum Energy Trading Corp., Tortola, BVI;
- Chevron Products Company, Houston;
- Shell Western Supply & Trading Ltd., Bridgetown, Barbados;
- Raindrop Petroleum, New York, N.Y.;
- Cardinal Connor Associates, St. Croix;
- Caribbean Logistics, St. Thomas;
- Trafigura AG, Bayamon, Puerto Rico;
- Peerless Oil & Chemicals Inc., Penuelas, Puerto Rico;
- IS International Services LLC, Lawrenceville, Ga;
- Hovensa LLC., St. Croix;
- and L’Oil Inc., Nashville, Tenn.
Let's hope they choose wisely and have someone competent enough to negotiate delivered fuel costs that will significantly bring down the horrendous costs of electricity to Virgin Islanders.
Our electrical costs drive our costs of living and doing business in the islands through the roof and adversly impacts every aspect of island life.
See below to see what others not living in the VI
pay:
Annual Average Price per Kilowatthour by State
(Lowest to Highest Rate as of 2010)
Rank State Average Electricity Rate for All Sectors
(Cents per Kilowatthour)
1 Wyoming 6.20
2 Idaho 6.54
3 Washington 6.66
4 Kentucky 6.73
5 Utah 6.94
6 North Dakota 7.11
7 Arkansas 7.28
8 West Virginia 7.45
9 Nebraska 7.52
10 Oregon 7.56
11 Oklahoma 7.59
12 Iowa 7.66
13 Indiana 7.67
14 Missouri 7.78
15 Louisiana 7.80
16 South Dakota 7.82
17 Montana 7.88
18 Kansas 8.35
19 New Mexico 8.40
20 Minnesota 8.41
21 South Carolina 8.49
22 Mississippi 8.59
23 Tennessee 8.61
24 North Carolina 8.67
25 Virginia 8.69
26 Georgia 8.87
27 Alabama 8.89
28 Illinois 9.13
29 Ohio 9.14
30 Colorado 9.15
31 Texas 9.34
32 Arizona 9.69
33 Nevada 9.73
34 Wisconsin 9.78
National Average 9.83
35 Michigan 9.88
36 Pennsylvania 10.31
37 Florida 10.58
38 Delaware 11.97
39 Maryland 12.70
40 Maine 12.84
41 California 13.01
42 Vermont 13.24
43 District of Columbia 13.35
44 Rhode Island 14.08
45 Massachusetts 14.26
46 New Jersey 14.68
47 Alaska 14.76
48 New Hampshire 14.84
49 New York 16.41
50 Connecticut 17.39
51 Hawaii 25.12
How's that for a reality check when we are paying almost twice as much as Hawaii does and they are out in the middle of the ocean?
Bring down? I have some really bad news for you, if you think the cost of electricity is going to go down. HOVENSA was footing the bill for half of your fuel-to-electricity cost. With them out of the picture, you're getting at least a 50% bump in the cost of energy, regardless of which supplier WAPA goes with.
What's even more ironic is that WAPA wants to store the fuel at the Hovensa Terminal, and DeJong said he won't allow Hovensa to operate as an oil storage terminal. So where are they going to store the fuel? In offshore barges?
We would have no need to store any fuel if we just learn to harness all the hot air coming from the VI Legislature.
LOL... That's a really good one Cgtstx...
If that happens, no one shall be able to afford to live here. Period.
Maybe we could then sell the islands to Disneyland.
It would be better run than it is, presently.
Glad you posted this Alana, show them!!!
Missing in that list is PR... The range price there is from 17 to 28 cents depending on the area... But it will come down because they are slowly switching to LNG.. Shouldn't the VIs start doing that also??? I know is not that easy because there is no storage facility but, the government for the territories might as well get started with the plans... and soon..
It's not a bad idea, but I do have reservations about that if it's operated by the government... But, doing so would open up quite a bit of other power generation options which could be used to supplement LNG via the use of a LNG infrastructure and help drive costs down even further... But, my reservations lies in the execution and the maintenance of such an infrastructure if it's left in the hands of territory's government... The shutting down of the diary industry there was another missed opportunity to introduce at least two industries into the territory with St. Croix at the helm:
1.) Bio-mass fuel production
2.) Sterile compost production