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HomeNewsArchivesWAPA BOARD APPROVES BIG FUEL SURCHARGE HIKE

WAPA BOARD APPROVES BIG FUEL SURCHARGE HIKE

The Water and Power Authority governing board approved major increases Thursday in the month fuel surcharge to electric and water customers, effective immediately.
In a long and occasionally acrimonious meeting, the board approved the fuel surcharge increases because the Public Services Commission had not acted on WAPA's May 15 request for an increase to take effect July 1.WAPA board member Andrew Rutnik, a former member of the PSC, said the action is legal, as the PSC's rules state that if the commission takes no action within 30 days, a rate change request is approved by default.
At issue is WAPA's "levelized energy adjustment clause" which authorizes the utility to readjust its fuel cost surcharges to water and power customers every six months based on open market fuel prices, which have been soaring for months.
The new surcharge for an average residential electric customer using 500 kwh of power in a month would be about $24.68, bringing the total bill to $88.58. For a commercial customer using 1,200 kwh, it would be $59.17, bringing to total bill to $245.58. WAPA public information officer Patricia Blake-Simmonds stressed that these figures are "only approximate" until Glen Rothgeb, WAPA fiscal officer, can finalize them.
For water customers, the new surcharge will be $1.52 per thousand gallons of potable water.
WAPA executive director Raymond George has said he sent the proposed increases to the PSC last November, intending for it to take effect Jan.1, but the PSC didn't act on the measure until April, when the surcharge rate last went up.
WAPA recently reported a $13 million shortfall in collections, which is separate from the multimillion-dollar debt owed by its biggest customer, the V.I. government. The PSC's delay in acting in a timely manner on requests to raise the fuel surcharges has been a big factor in the revenue deficit, utility officials say.
George said may people have the misconception that the $13 million shortfall has to do with the enormous debt the government owes WAPA. He stressed the two have nothing to do with each other. The fuel surcharge increases are due to soaring worldwide oil prices, he said, adding that he doesn't see them going down any time soon.
George asked for the increases over a year, until next June. He said to recoup the $13 million in six months would have required a 33 percent increase in the surcharges, so he spread it out over a year, as a 20 percent increase. The last fuel surcharge adjustments, in July 1999, were based on fuel costs of $21.28 per barrel. Since then, prices have gone as high as $31 a barrel.George had said he hoped fuel costs would decrease by December so the surcharges could be scaled down.
After spending the first half-hour determining the agenda Thursday, the board got down to how best to prepare the public for the steep hikes coming in utility bills. George had called the meeting a few days earlier than usual in order to get the fuel surcharge increases approved and get the July bills out.
Committee chair Carol Burke said the media had misrepresented the fuel surcharge and suggested WAPA needed a public relations plan to explain the LEAC. All members agreed on the need to do something to ensure that the public would understand the increase. George noted that Wednesday's San Juan Star had reported that Puerto Rico's fuel surcharge had gone up 110 percent.
George was attacked by Rutnik as having the "worst public relations of any government agency," although Rutnik said his coment "wasn't personal." Rutnik suggested George appear on talk shows, and George said he had no objection to that. Rutnik also suggested Blake-Simmonds appear on a show to head off what board member William Lomax called the "inevitable public backlash."
Rutnik offered one explanation of why some government agencies' power bills could be so high, such as that of the Housing, Parks and Recreation Department. At Coki Point on St. Thomas recently, he said, he observed several businesses – food concessions and others – plugged into a department line via simple extension cords. "There's no security whatsover," he said. He added that he unplugged the cords and was thinking about doing it every day. He said he was with a department representative at the time who "didn't appear very concerned."
George brought some good news to the board meeing. He said that in June WAPA received $7.7 million from the government's executive branch and a total of $1.1 million from the other individual government agencies. This leaves the executive branch past due on another $11.4 million and all others behind $3.9 million, for a total of $15.4 million past due.
George also addressed WAPA's Federal Emergency Management Agency audit. He said the publicized $8.9 million perceived as what WAPA owes isn't right. "That sum is the difference between what has been paid us, and what we're trying to reclaim," he said. Rothgeb said, "If it were all ended today, FEMA would owe us about $700,000."
In other action, the board approved $142,956 for purchase of utility poles from Atlantic Woods Industries and $188,053 to Besco Inc. for repairs to unit 14.
George said he has contracted with three mainland utility companies in the event of needing assistance this hurricane season. He said FEMA will transport assisting power companies with whom WAPA has a contract and expedite the process of getting them here.
Board members present at the meeting were Burke, Lomax, Rutnik, Claude Molloy, J. Arthur Downing, Alphonso Franklin and G. Luz James Sr.

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