July 29, 2004 – Repeal the streetlighting surcharge now tacked onto Water and Power Authority electric bills, WAPA's executive director, Alberto Bruno-Vega, urged legislators at a meeting on Thursday of the Senate Finance Committee as it continued its fiscal year 2005 budget hearings.
He said a court case in the state of Washington indicated that such surcharges are unlawful because it is the responsibility of the government, not electric company customers, to provide streetlighting.
The Legislature in 2002 transferred responsibility for streetlighting to WAPA from the Public Works Department.
"It started here and has to stop here," Sen. Adlah "Foncie" Donastorg said in agreement with Bruno-Vega. Donastorg, who chairs the Finance Committee, said he was the only senator who voted against the 2002 bill.
However, Bruno-Vega pointed out that if the electric bill surcharge is repealed, the Legislature must come up with the $2.2 million a year it costs to keep the streets lighted.
Bruno-Vega, in his FY 2005 overview presentation to the committee, also asked the senators to include line items in department and agency budgets for the payment of utility bills. Several senators said his request bolstered their opposition to lump-sum budgets, which have been requested by numerous departments and agencies.
And, the WAPA chief executive asked that the Legislature appropriate money to pay government agencies' long-overdue WAPA bills. He said money budgeted for FY 2004 can't be used to pay bills dating from previous years.
WAPA's chief financial officer, Nellon Bowry, a former director of the Office of Management and Budget, said the most recent figure on the overdue utility bills of V.I. government entities is $15.8 million.
However, the V.I. Housing Authority has come up with a payment plan to pay $4.16 million by December 2005. The money owed predates the federal takeover of the agency last August. (See "VIHA Seals Deal to Pay WAPA Debt with a Big Check".)
While the WAPA officials didn't provide specifics on past-due accounts for most government agencies, Bruno-Vega said Juan. F. Luis Hospital owes a total of $3.7 million. Of that figure, $658,924 dates from before the hospital gained semi-autonomy in 1999. He said the hospital submitted a payment plan, but it wasn't acceptable.
Bruno-Vega said the hospital got into such arrears because it must treat all patients even if they can't afford to pay. "It's a problem regarding the economic situation on St. Croix," he said.
Turning to WAPA's own needs, Bruno-Vega urged the senators to find funding in the 2005 budget for the $2.5 million the utility needs to extend its potable water line from Emerald Hills eastward to Red Hook, where it's to be connected via undersea cable to St. John. He said the money was appropriated from the St. John Capital Improvement Fund this fiscal year but was not allotted.
"We made commitments based on that promise," he said, but the money "was taken away and used for other purposes."
Bruno-Vega also said that because the Public Services Commission considers the fuel surcharge paid by customers as part of the utility's revenues, WAPA is paying about 65 percent of the PSC costs. The PSC funds itself by levying assessments on WAPA and the private enterprises it regulates.
He said the PSC needs to reconsider including the energy surcharge as revenue.
He also suggested that the commission develop its own technical expertise team so it doesn't have to spend millions of dollars on high-priced consultants. The costs of contracting those consultants are passed on to WAPA and the other regulated entities.
Bruno-Vega said WAPA has sent staff for training so it won't have to rely so extensively on consultants.
He said the large amount of money owed to WAPA by government agencies coupled with the energy surcharge situation is having a negative affect on the authority's bond rating.
While the Legislature doesn't have authority over WAPA's budget, the utility, like the territory's other semi-autonomous agencies, must make its yearly appearance before the Finance Committee to discuss current fiscal issues.
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