The V.I. Water and Power Authority Governing Board approved its Energy Production Action Plan at its regular meeting Thursday, laying the groundwork for partial conversion from fuel oil to natural gas and other measures.
The plan is a compilation of information from management that the board has studied over the last few years, according to a statement from WAPA. It includes a synopsis of existing plant equipment, an outline of current system challenges, a comprehensive synopsis of recent planning efforts, a summary of objectives the board believes must be achieved to reduce energy costs, a definition section of technical terms used throughout the document, suggested efficiency enhancements, and target dates for implementation of some of the technologies mentioned.
According to the document, WAPA's governing board has determined the best strategy for the reduction of the cost of energy in the Virgin Islands will have WAPA:
– Implement measures to enhance production efficiency at existing power generation facilities;
– Convert base-load power production from fuel oil to liquefied natural gas and/or propane;
– Develop grid interconnection between the Virgin Islands and Puerto Rico;
– Maximize development of solar and wind resources; and
– Pursue biomass energy and ocean thermal energy as potential diversification of base load energy.
“These are complex issues, with lots of nuances and no easy answers,” Board Chair Gerald Groner said in WAPA's statement. “I’m hoping that this document will raise everyone’s level of discussion, so we could find solutions.”
V.I. Energy Director Karl Knight, one of several engineers on the board spearheaded the writing of the utility’s comprehensive plan, said the the plan pulls together all the information in a useful package.
“Having all the information compiled in one place is useful not only to us for planning purposes, but also to the general public,” Knight said.
WAPA Executive Director Hugo Hodge Jr. said the utility's focus remains finding ways to meet the needs of the territory as, “no one is exempt from the burden of the price of energy in the territory.”
Groner said the document will be available on the authority’s website within a few days and within a few weeks printed copies will also be available to the public
Thursday the board approved a request from Hodge for qualification for liquid natural gas and liquid petroleum gas (LPG or propane). WAPA anticipates converting its power generation facilities on St. Thomas and St. Croix to use LNG or LPG as the primary fuel.
According to WAPA, using small-scale LNG to supply the plants with natural gas is likely doable, but may take several years to develop, permit, finance and build the receiving and transporting infrastructure and secure supplies. So WAPA is also pursuing a suitable alternative fuel such as LPG that can be used in transition. WAPA would be responsible for converting its existing infrastructure to make it compatible with LPG or LNG, while the successful respondent or respondents to the RFQ will supply the LNG or LPG and develop the necessary infrastructure to import and deliver it to WAPA’s Harley Power Plant on St. Thomas and Richmond Power Plant on St. Croix.
WAPA's announcement said the utility will implement aggressive timelines for this project.
“We expect to launch [RFQs] the first week of October,” Hodge. “Bids will be due Jan. 9th, 2013, shortly after which we’ll shortlist the bidders and expedite the process that leads to a selection of developer(s).”
The board went into executive session and afterwards board secretary Noel Loftus reported Hodge asked for and got authorization to immediately start negotiating with the three top-ranked bidders shortlisted from the request for proposal for a new fuel oil supply for the utility. Hodge said the process will begin with the best bid to see whether an agreement can be reached, moving on to the others if negotiations are not fruitful.
WAPA was forced to seek a new supplier after Hovensa announced earlier this year it would no longer supply fuel oil to the utility after Dec. 31.
The names of the shortlisted companies will be released next week, once all unsuccessful bidders are notified. The utility received 12 responses to its Aug. 22 request for fuel from:
– Cardinal Connor;
– Caribbean Logistics;
– Chevron Energy Technology Company;
– International Services;
– Novum Energy;
– Peerless Oil & Chemicals;
– Raindrop Petroleum;
– Shell Western Supply & Trading Limited;
– Trafigura AG, Puerto Rico Branch; and
– Vitol Inc.
The board also approved:
– An extension of contract time by three months for Elephant Construction Consultant to complete the design, purchase, construction and installation of four metal air-conditioned insulated buildings to house St. Thomas’ East End and Tutu Substations' 15 kilvolt and 34KV switchgears at no additional cost. The new completion date is Dec. 8.
– An extension of the contract with CIMCON Software to Dec. 31, for the continued installation of a streetlight control system and training of WAPA personnel on the new software. While all materials were on island, the installation process was delayed due to vehicle maintenance. The extension is at no extra cost to the utility.
– The purchase of two new utility trucks for the St. John Line Department from Caribbean Auto Mart, two used bucket trucks for the St. Thomas Line Department from I-80 Equipment, as well as one bucket truck from PECO International and a utility truck from Caribbean Auto Mart both for the St. Croix Line Department all at a total cost of $435,000.
– A contract with RG Engineering to complete the fire protection systems for the Richmond and Harley Power Plants at a cost $3.86 million over three years, subject to negotiations with WAPA.
– An extension of General Electric International, Inc.’s contract termination date to Nov. 15, for the major inspection and repair of St. Thomas’ Unit no. 15, at no additional cost to the authority. This extension will accommodate contractor payments for work performed beyond the original contract deadline.
– An extension of the original contract date and use of additional funds from the 2005 Drinking Water Capital Improvement Grant Program for the Whim Waterline Rehabilitation Project. The new project completion date is Nov. 30.
Attending the meeting were Groner, Young, Knight, Loftus, Licensing and Consumer Affairs Commissioner Wayne Biggs, Cheryl Boynes-Jackson and Donald Francois. Department of Planning and Natural Resources Commissioner Alicia Barnes and Brenda Benjamin were absent.