The V.I. Water and Power Authority entered into a 25-year power purchase agreement with Tibbar Energy at a governing board meeting Thursday on St. Croix. The agreement moves the biomass energy company one critical step closer to its goal of operating a power plant and massive agricultural program on St. Croix.
WAPA also approved an “interconnection agreement,” which provides a blueprint for how the energy produced by Tibbar will be integrated into WAPA’s grid.
Tibbar will be liable for up to $1.38 million in construction costs to facilitate the interconnection. WAPA Executive Director Hugo Hodge said he believed that sum would be sufficient to complete the project.
WAPA will pay 24.5 cents per kilowatt-hour to Tibbar for the first five years of the agreement, 24 cents for years six through 20, and 23 cents for the remainder of the contract.
WAPA has an option to extend the contract for an additional five years at 25 cents per kilowatt-hour.
The agreement calls on Tibbar to generate 7 MW for the St. Croix grid. Hodge said WAPA will not be dependent on that energy, however, so the authority is not at risk if the company fails.
If for any reason electricity is not available through Tibbar, WAPA can activate an additional generator at its Richmond Power Plant and Tibbar will be forced to pay fines to compensate for the cost.
Hodge said that by locking in the price of power with Tibbar for such a long contract, it hedges WAPA’s exposure to volatility in the fossil fuel markets.
He also said that it would help WAPA reach its goal of generating 20 percent of its electricity from renewable resources by 2015, and does so in a way that will be more stable and reliable than wind and solar projects.
Biomass is a “dispatchable” source of energy, meaning that, unlike wind or solar, it can generate power on command, night or day. According to Tibbar, their power plant will utilize anaerobic digestion technology, which harnesses gasses from decaying organic matter and burns them to power a generator.
The main source of fuel for the project will be giant king grass, which the company proposes to grow and harvest at several locations around the island.
Speaking on behalf of Tibbar, attorney Kevin Rames said the project “will constitute a new renaissance for farming on the island.”
In addition to farm related jobs connected to their cultivation, Rames said commercial farmers will have access to the waste biological material from their digesters, which can be used as a fertilizer. He said they would also benefit from several water management projects the company has planned.
Rames said the project would also help the environment in a very direct way. Tibbar is negotiation with the V.I. Waste Management Authority to utilize wastewater to irrigate its fields, which would otherwise be pumped into the ocean.
Voting for the power purchase agreement were board members Gerald Groner, Karl Knight, Alicia Barnes, Elizabeth Armstrong, Donald Francois and Juanita Young. Wayne Biggs and Cheryl Boynes-Jackson were absent.
Noel Loftus abstained from the vote. “I have no interest in voting no,” he said. “I like the project; however, I have questions about the stability.”
Speaking after the meeting, Hodge said there was nothing inherent to the Tibbar plant that would cause instability in the grid. Rather, it is the overall prospect of adding multiple, small energy providers to St. Croix’s grid that could cause issues, he said.
Hodge said that in the coming years, St. Croix could be generating half of its energy from renewable sources, from Tibbar, a planned industrial solar farm and small net-metering operations.
When that occurs, he said the Richmond Power Plant would only have to run a single generator to provide the island with the rest of its energy demand. This, he said, introduces the prospect of instability.
If that one generator should fail for whatever reason, there is no way for the renewable energy sources to ramp up production to provide the suddenly missing electricity, Hodge said, which means there would likely be an islandwide power outage for 15 to 20 minutes while WAPA brings another generator online.
During the meeting, WAPA also moved closer to implementing its advanced metering infrastructure (AMI), a longtime goal of the authority to modernize its operation.
The board approved two contracts. The first will pay Apex Covantage $1,333,648 to replace approximately 50,000 conventional meters with the new “smart” meters, which will send information directly to WAPA rather than having employees manually read them.
The second contract will pay $534,500 to Harris Utilities to set up a database that will analyze the data collected from the AMI meters.
In other business, the board voted to:
-Extend the contract with Fortress Electric to bury electrical cables in Christiansted at a cost of $41,194;
-Purchase a 69 kV GIS and relay protection equipment at a cost not to exceed $2,902,696;
-Extend a contract for the installation control systems for WAPA’s unit 10 and 11 steam turbines until Nov. 30, 2013, at the cost of $768,000;
-Approve a $600,000 payment to Patrick Charles Enterprises to provide emergency and supplemental labor for maintenance services at the Randolph E. Harley and Richmond power plants;
-Approve a contract with Sulzer Turbo Services in the amount of $1,306,455 to inspect and repair the unit 16 gas turbine and generator;
-Fix a clerical error in a contract with Rockwell Automation that listed the contract amount at $2,273,060. The correct cost is $2,473,060;
-Approve a contract with Comprehensive Security Concepts Inc. to provide security at WAPA’s facilities for one year at the cost of $691,280;
-And approve a contract with BDO for independent external auditing services at the cost of $340,000.
