Oct. 26, 2002 – Talks are expected to begin soon between the Water and Power Authority and a company that wants to sell electricity and water to the utility as a part of its solid-waste processing system for the territory. WAPA meanwhile is appealing the decision that made the talks mandatory.
The decision to negotiate with Caribe Waste Technology came during a recent meeting of the WAPA governing board and three months after the Public Services Commission certified CWT as a small power provider, paving the way for the company to build and operate at least one waste-to-energy production plant in the Virgin Islands. But at the same meeting, the board voted to appeal the PSC's certification of CWT, although board members voting against the move questioned its propriety.
(For background, see "WAPA board balks at push for talks with CWT".)
Meantime, CWT's chief executive officer, Mark Augenblick, said company executives "look forward to negotiating in good faith" with the WAPA board "for the purchase of power and water." He said later that it was most likely the company would sell only electricity, and not water, to the local utility.
Since the WAPA board's go-ahead to begin negotiations, Augenblick said, he had heard from WAPA attorney Samuel H. Hall Jr. and representatives of Skadden, Arps, Slate, Meagher & Flom, a New York law firm the utility had hired to investigate CWT's technological and financial background while the company's application for certification was before the PSC.. Augenblick said he thought it was a smart move for WAPA to engage the same firm for the negotiations that it had used for the investigation.
CWT and WAPA jointly had hired Stone and Webster, a utility consulting firm, to investigate what the "avoided cost" to WAPA would be of an agreement for the utility to purchase power produced by CWT. The WAPA board decided to retain Stone and Webster until it completed the avoided cost study.
WAPA's acting executive director, Glenn Rothgeb, told board members at their last monthly meeting that outside counsel would be needed to draft a skeleton interconnection contract. "I believe professionals operating in good faith can accomplish a great deal," he said.
On Friday, Augenblick said he expects negotiations to begin as soon as the parties involved can find a mutually agreeable date. From CWT's perspective, he said, talks could begin within a week. He estimated that it could take four to six weeks to reach an agreement.
One WAPA board member, Andrew Rutnik, said holding the talks is the responsible thing to do, given the mandate from the PSC, which regulates the utility. By law, he said, "we're required to negotiate with them."
But at the same time, Rutnik said, talks about WAPA agreeing to buy power derived from burning trash are only talk until CWT proves it can deliver a reliable product consistently. It's a point that other board members, including Claude "Tappy" Molloy, raise as their primary objection to holding the talks at all.
Molloy said his doubts are based on the facts that the company has no assets, owns no land, has never built the kind of waste-to-energy plant it is proposing to build in the Virgin Islands, and is proposing to use technologies that have never been used commercially before. "I'm opposed to it because our consultant indicates it's a sham," he said.
He added, "Interstate General is the parent company of Caribe Waste Technology, and they don't do anything in this area." CWT itself, he said, hasn't "had a profit in the last five or six years. They're not viable."
Molloy said he opposed the WAPA board's decision to enter into the negotiations while simultaneously appealing the PSC action that made the negotiations mandatory. He did so, he said, "because if we win on appeal, we don't have to negotiate."
Attorney Hall did not return telephone calls inquiring as to the status of the board's appeal.
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