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Charlotte Amalie
Monday, July 22, 2024


With the proposed deal between the V.I. government and Southern Energy Inc. a dead issue after the early Saturday vote of 9-6 against it, the question now is, what's next?
According to Andrew Rutnik, nothing, for a long time.
"I think it will be years before anything surfaces," the V.I .Water and Power Authority board member and Licensing and Consumer Affairs commissioner said Sunday. "Forget a co-op."
Southern Energy representative David Dunbar told the Source early Monday morning, "Southern Energy will not make another proposal for WAPA." Even if the V.I. government were to put out a request for proposal, he said, "Southern would most likely not bid for WAPA."
Legislative hearings on the joint venture that would have sold 80 percent of WAPA to Southern painted a picture of widespread dissatisfaction with the operation of the utility. Rutnik said now that board members have more information thanks to the pre-sale evaluation, WAPA has a lot of work to do to make the utility more efficient and profitable.
He said WAPA claims to have "line loss" — the difference between the amount of power generated and the amount collected upon — of about 12 percent. Southern put the loss at more like 16 percent, he said.
Either way, Rutnik said, each percentage point amounts to $500,000 in lost revenue.
"That amounts to millions of dollars," he said. "WAPA has to spend some money to safeguard its generation, work on putting in more capacitors and work on finding and enforcing illegal hookups."
But that won't be easy, he said. "They don't have time, skills or the management to do that."
Rutnik also said the post auditor's report and the Senate legal counsel's opinions – both negative on the deal – "lacked substance."
Sen. Allie-Allison Petrus, who along with Sens. Lorraine Berry, Gregory Bennerson, V. Anne Golden, Roosevelt David and David Jones voted for the joint venture's passage, said Sunday he was disappointed.
He also said he believes there will be no attempt to improve operations at WAPA. "I anticipate if any changes are made, they will be cosmetic in nature – the status quo will prevail," he said.
Petrus said the defeat of the joint venture is the result of Virgin Islanders who are constantly fighting change.
"My philosophy is that we need radical changes in WAPA, and the presence of Southern would have presented the opportunity to upgrade WAPA and attract new business to the territory," he said.
John deJongh Jr., president of the St. Thomas-St. John Chamber of Commerce, said, "While disappointed with the final vote, we were not surprised by the outcome. The Chamber had its concern with the absence of a competitive bid process, but in the end thought the financial strength of Southern, the job security features for the employees, the proposed rate-making process that would be measured by efficiency and the focus on economic development initiatives provided a proper balance."
DeJongh mirrored sentiments expressing the need for change. "The unanswered question is, what is our next step?" he said. "But most assuredly it is that WAPA has to change its way of doing business – this is one thing everyone agreed on."
Sen. Almando "Rocky" Liburd, who voted against the proposal, said Sunday he will call on Senate President Vargrave Richards to convene public hearings to discuss problems at WAPA.
"Come Monday, I will urge Sen. Richards to bring in (WAPA executive director) Raymond George and the entire management team to discuss the problems identified during the process," he said.
Liburd said he does not believe the Southern proposal, while good in some respects, offered the territory the best deal. "WAPA is worth more than a couple hundred million dollars," he said.
The WAPA profit margin should be around $20 million a year, he said. "If the authority is profitable when the government owes millions, then we should find out why WAPA is not as profitable as it should be. I would be against allowing the status quo to prevail," Liburd added.
He hinted that he would support an attempt to contract out the management of WAPA and dismantle the governing board.
Planning and Natural Resources Commissioner Dean Plaskett, also a member of the authority's governing board, said he was disappointed at the outcome of the Southern vote. "The complete truth was not told, specifically when it came to testimony from Mr. George."
Plaskett said George's testimony that the government was willfully not paying its power and water bills so WAPA would fail was misleading.
"This administration has paid more bills, $7 million in the past year, than any administration in the past five years," Plaskett said. "That shows our intent on liquidating the government's debt."
Plaskett, who also served on the governor's negotiating team for the joint venture proposal, said he thought senators who voted to defeat the Southern pact were concerned about re-election in three months. "They tend to listen to opposition based on emotions rather than on the bare facts," he said.
The emotions that flared through the 18-hour-long proceedings that began Friday and continued until 4:30 a.m. Saturday were often rancorous and disruptive. Sens. Alicia "Chucky" Hansen and Adelbert M. Bryan, in a series of political maneuvers, caused hours of reports to be read into the record.
During testimony by Southern Co. representatives, Hansen repeatedly interrupted them, calling loudly for "point of order," "point of information" and at one point, "point of any damn thing."
Richards had to stop the proceedings several times during Hansen's tirades.
Rutnik, Petrus and deJongh decried the behavior.
"I thought it was disgraceful," Rutnik said. "It was obviously pandering to the audience."
Petrus said the senators can be heard all over the world via the Internet. He said there was no reason for the behavior.
DeJongh said, "It is unfortunate that regardless of a senator's position or a presenter, that we in the community and the representatives of Southern, PricewaterhouseCoopers, Arthur D. Little and others were treated with such disrespect. It is acceptable to oppose a transaction but there is no reason to embarrass an individual or treat them rudely."
The nine senators voting against the joint-venture proposal were, Sens. Adelbert M. "Bert" Bryan, Donald "Ducks" Cole, Adlah "Foncie" Donastorg, Judy M. Gomez, George Goodwin, Alicia "Chucky" Hansen, Norman JnBaptiste, Almando "Rocky" Liburd and Vargrave Richards.

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