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Charlotte Amalie
Monday, July 22, 2024
HomeNewsArchivesCO-OP FORMED IN HOPE OF PURCHASING WAPA

CO-OP FORMED IN HOPE OF PURCHASING WAPA

If community activist and Senate candidate Gail Watson Chiang has her way, territorial residents and not Southern Energy will be the owners of the V.I. Water and Power Authority.
At a public forum Monday night to discuss how electric cooperatives work, Chiang announced to about 50 people that she and 13 other residents filed papers Monday afternoon with the Licensing and Consumer Affairs Department to establish the V.I. People’s and Consumers’ Cooperative.
The aim of the cooperative is to form a board of 11 people – four from WAPA, four from the business community and three residents – and then secure loans from the National Rural Electric Cooperative Association, known as NRECA, and the Cooperative Finance Corp., or CFC.
Residents interested in joining V.I. PACC would pay $5 and essentially become an owner of the new utility. Once it was purchased, they would have a say in how it is managed, including voting for members of the board of directors.
According to Cliff Humphries, legislative representative at the NRECA, and Thomas Nusbaum, director of cooperative development at the CFC, the idea of Virgin Islanders rather than the government owning WAPA isn’t a pipe dream. Access to low-cost capital, management expertise and storm insurance, among other things, are available to cooperatives through their organizations and a host of others, Humphries said.
Cooperative ownership of electrical utilities in the U.S. dates back 64 years. Cooperatives now own 930 utility systems in 46 states and serve some 34 million customers, 12 million of whom own a share of the utility from which they receive their power.
"You’re not alone," Humphries said. "There is a vast and sophisticated network."
The benefits of cooperative ownership over investor-owned utilities are many, he said. Because the utility is locally controlled, management is more responsive to the needs of the consumer. Also, rates are lower because they operate at cost without having to satisfy investors.
"Really, the people making the policy for the company are the consumers," Humphries said. "And if you make a profit consumers get a rebate."
Chiang requested two weeks ago that Gov. Charles Turnbull and the Legislature hold off on a decision to sell 80 percent of WAPA to Southern Energy so V.I. PACC can organize and make a bid to buy the utility. As of Monday, she said neither the administration nor Senate leaders had responded to her request.
"This is an option worth looking into," Chiang said. "We have the makings of a cooperative. It’s up to the community to decide if it’s a viable option."
V.I. PACC now has 14 members, Chiang said, adding that any V.I. resident can join for $5. Members hope to elect an 11-person board at the co-op’s first meeting Oct. 15. The board would be made up of WAPA employees, members of the territory’s hotel and tourism associations, business groups and residents.
In order to remove politics from the utility’s operations, no politicians or those seeking office would be allowed to sit on the board, Chiang said, including herself.
V.I. PACC’s first order of business is to "extend an olive branch" to the business community and come up with a list of possible board members, Chiang said.
"We can finance it," she said. "If we have the government working with us, it could take us outside of six months to get going. Without it, it could take a year."
Atlanta-based Southern Energy has offered to purchase 80 percent of WAPA for almost $400 million, including $105 million in cash up front.
Meanwhile, the Senate has set a schedule for public hearings on the proposed sale. The hearings begin at 10 a.m. Aug. 8 on St. Thomas in the Senate chambers, and continue at 10 a.m. Aug. 9 at the Legislature in Frederiksted. St. John's hearings are set for 10 a.m. Aug. 10 at the Legislature Conference Room.

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