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Charlotte Amalie
Sunday, July 14, 2024


From private citizens to private sector, labor and utility officials; Senate alumni and Senate wannabees; civic leaders, college students and seniors, all spoke out Tuesday on their views on the proposed privatization of the Water and Power Authority.
More than 50 persons testified all day long Tuesday before a mute Legislature in the first of three public hearings on the proposed sale of 80 percent of WAPA to Southern Energy Inc.
The Legislature is scheduled to vote the deal, proposed by the Turnbull administration, up or down on Friday.
Senate president Vargrave Richards instructed the packed and vocally partisan gallery that no cheering or applauding would be tolerated. He said each testifier would be given five minutes with no Senate questioning in between.
WAPA was called everything from a "kerosene lamp" to a "cultural asset," and SEI was called everything from a "savior for the youth" to "a bunch of modern-day pirates" as the hearing moved rapidly along. Opinion was split almost evenly – 25 for and 29 against the proposal.
A large number of witnesses coming from both camps agreed on one thing: Competitive bidding should have taken place, or the government should have explored other alternatives before narrowing the choice to one option.
Local newspaper columnist and talk-show host Eddie Donoghue started things off accusing the administration and SEI of running a public relations campaign that has "polarized the community."
Donoghue said that PricewaterhouseCoopers and Arthur D. Little, consultants for the administration and the Senate, respectively, both submitted "seriously flawed" reports because they "assume that Southern Energy as is currently constituted will… own WAPA, but the new entity will be Southern Energy Corp., an unregulated entity."
PwC prepared a favorable report for the administration on SEI's proposal. ADL in July submitted a report listing the advantages and disadvantages of the proposal, not taking a side.
Alternative ownership options
WAPA employee representative John Hodge Jr. said the employees had "no idea that WAPA was for sale, and when they did find out, they investigated an employee ownership plan." Hodge said he believes the employees have the means to "turn the company around."
Representing Hodge and the WAPA Employees Buyout Committee, Michael Shay, executive vice president of Shay Kimple Consulting Group, said economic and social capital criteria should be developed against which any transaction would be evaluated. Social factors, he said, include island ownership and employee support in planning WAPA's future. He advocated "competitively shopping the transaction."
Cliff Humphrey, representing The National Rural Electric Cooperative Association, said he wanted to encourage territory leadership to examine all viable alternatives to the current proposal. He said NRECA was not opposing "any proposal for future ownership of the V.I. utilities." Rather, he said, NRECA would urge the Virgin Islands to consider the benefits of a not-for-profit, consumer-owned cooperative, and would work to prepare an analysis comparing the current WAPA sale to a cooperative alternative.
WAPA board member Claude Molloy, a publicly outspoken opponent of the proposal, said "the Legislature is slanted in a strange manner in favor of SEI." Molloy strongly hinted "a scandal for the V.I., a storm is coming." He didn't elaborate on the coming weather, but said he was concerned about the welfare of senior citizens.
About this time Sen. Alicia "Chucky" Hansen said she had been sitting "quietly, humbly, while people are trying to shove Southern Energy down our throats." She asked about time for questioning. Richards repeated that questioning would not be permitted in between testimony.
Senate aspirants have their say
The long day was spiced every now and then with the unmistakable ring of campaign rhetoric as seven declared senatorial candidates addressed the forum – Steven Frett, Gail Chiang, Tyrone Martin, Celestino White, Norma Samuel and Raymond "Usie" Richards were firmly against the proposal. Wilma Marsh-Monsanto wanted to know "who had approached whom" first about the sale. It wasn't clear what position she took on the issue, as she urged the senators to "do their job."
Gail Chiang, a St. Croix candidate, is challenging the proposal in court because there was no competitive bidding. She said there is no "audited financial statement" and charged that PricewaterhouseCoopers will get a bonus "for selling us down the drain." She said she will take her current litigation "to the Supreme Court" if necessary.
John deJongh Jr., president of the St. Thomas-St. John Chamber of Commerce, urged the senators to approve the partnership. He said as a former WAPA board member and chair of the governor's economic recovery task force, he didn't "take the matter lightly." He said the Chamber strongly endorses privatization of WAPA and some other government services.
Fred Hintz, president of St. Thomas Dairies, said he is paying 14 percent more for 6 percent less power than last year. He said his costs have gone up 23 percent. "It is unfortunate there has been no competitive bidding," he said, "but the PwC report has been out since March, and nobody has jumped on the bandwagon." He said he has to have dependable power to run his business, and he is in favor of the proposal.
Leona Bryant, Radio One talk-show host and former Tourism director, said she was appearing as a "concerned senior citizen." She urged the senators to accept the proposal for "our grandchildren, for the next generations." She said SEI is a "sound, reputable company with the interest of the youth," and that the acceptance of SEI would encourage other business to come to the territory.
Speaking strongly in favor of the proposal, Prime Foods & Supply president Pat Kelly said his power had increased 25 percent in the past few months and he can't afford interrupted power. This was seconded by Tom Gardner of Fortress Storage, who said WAPA "needs to be fixed."
Local banker James Crites, speaking as a private citizen, said consumers deserve reliable and reasonably priced electricity. He said SEI has a "successful track record in similarly situated circumstances." He said for businesses reconsidering relocating to the territory, reliable power is a critical concern. He urged senators to approve the proposal.
Resort wants to get connected
Alvin Nazario, Wyndham Sugar Bay Resort engineering director, recounted a history of negotiations between the resort and WAPA for the authority to connect the resort to WAPA's electrical distribution system.
Although the resort's own power plant is reliable and cost effective, it is also noisy and dirty, Nazario said, and for that reason the resort wanted to connect to WAPA's grid. He said the resort had hired an outside consultant who said WAPA could "reap the benefit of up to $1 million per year."
In June, Nazario said, at a meeting on details of the proposed installation, the WAPA representatives attending "didn't have the decision-making power to negotiate this installation."
Nazario continued that "in the midst of discussing a crucial point… I was shocked to glance over and notice one of the WAPA representatives had fallen asleep at the table." He said that he "fully supports the"proposed partnership."
Neither the League of Women Voters nor the American Association of Retired Persons took a stand on the issue. Erva Denham, LWV president, said the League was divided into thirds – one group is opposed in principle to outside privatization, another is in favor of the proposal, and a third sector wants more information on every
Ed Phillips, chair of the AARP state legislative committee, said the association "takes no official position." He, too, said further study is needed, jointly by the Public Services Commission and the Legislature.
Students take a pro posture
Students from the University of the Virgin Islands were strongly in favor of the proposal, expressing themselves articulately in well-prepared statements. Class of 2000 president Donnie Dorsett asked the senators to think of the students' future. Many young people are leaving the islands because of the lack of economic opportunity, he said, but the SEI partnership could provide the trigger the economy needs.
Dorsett concluded by saying that he was planning to seek employment here in the Virgin Islands and the asking the senators to help him fulfill his dreams.
Former senator Elmo D. Roebuck Sr. said he is "unalterably opposed to the sale of WAPA" to SEI, calling the proposal a "wanton giveaway" of the people's assets. Roebuck said he wasn't opposed to privatization programs in general, but said "they must be developed in an atmosphere of competition." He said he was dismayed about the "cloak and dagger" manner of the proposal.
Roebuck also said he found it "strange that the WAPA board didn't take a formal vote to approve this deal," and that "the signatures which will be needed from WAPA" to conclude the deal exclude "its chairman and a majority of members of the board."
Michael Bornn, local businessman and acting Tourism commissioner a year ago before he was fired by the governor, spoke against the proposal because of the lack of competitive bidding. He said he had spoken personally with two prospective bidders who wouldn't touch the deal without a "level playing field."
Bornn reminded the senators of when "a deal was cooked up for the airport, without competitive bidding." He added, "Look what we have now. DPNR has to take up the second floor." He said the government didn't do its homework, "and that's what always happens."
Zysca Williams, president of the Association of Concerned Native Virgin Islanders, said the association "overwhelmingly opposes the agreement with SEI" for several reasons, the first being that the proposal was never put out to bid. Also, she said, the PSC wasn't consulted, Federal Emergency Management Agency assistance would not be available to a private company, and other alternatives are preferable – such as an employee buyout. Williams concluded that it is "an insult … that we can't solve our own problems."
Of wooing, wining and dining
Hubert Turnbull, president of the WAPA Employees Association, urged the senators to turn down the proposal. He said he had never seen any senators, nor any of the "young people in white T-shirts" out walking around in the WAPA plant to see what it looked like. Several SEI supporters were wearing white Southern Energy T-shirts.
Turnbull said he had been "wooed, wined and dined by SEI in Atlanta." He said it wasn't his "best decision to go up there." He added, "I know what I was offered to say it's a good deal, and I wonder who else was offered something." Richards announced that SEI officials would have an opportunity to respond to those allegations before Friday's Senate vote. Calls Tuesday evening to SEI representatives were not returned.
All 15 senators were present at the hearing. Rudolph Krigger Sr., the governor's financial advisor, and Alric Simmonds, the governor's deputy chief of staff, also were present but didn't testify.
The second hearing is to begin at 10 a.m. Wednesday at the Legislature Building on St. Croix. The third is set for 10 a.m. Thursday in the Legislative Conference Room on St. John.
WTJX-TV carried the hearing live Tuesday. According to a station spokesperson at about 6 p.m. Tuesday, a decision on Channel 12 covering Wednesday's hearing had not been made.

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