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WAPA-PSC Power Fight Comes to a Head in Senate

Oct. 3, 2004 — Alberto Bruno-Vega, executive director of the V.I. Water and Power Authority, vented his frustrations Friday over an amendment to a bill approved by the Senate the day before.
The amendment was attached to the Financial Services Act bill, which calls for stricter regulation of the territory's banking industry. This amendment, offered by Sen. Norman Jn Baptiste Thursday and passed overwhelmingly, directs WAPA to negotiate and enter into a power purchase agreement with any small power producer or cogenerator on St. Croix providing it has been certified by the Public Service Commission and will invest $150 million on St. Croix within a four-year period.
The power producer is required to provide at least 400 jobs, 90 percent of which must be held by "bona fide residents," defined by Jn Baptiste's bill as U.S. citizens that have resided in the territory for at least five years.
Another provision would require the power producer to invest $100,000 annually, for the life of the agreement, which would go to the departments of Education, Human Services and Housing, Parks and Recreation – for use specifically on St. Croix.
Finally, if the measure becomes law, WAPA must reach an agreement with the small power producer within 90 days of its enactment. Failure to do so will result in an "advisory commission" being formed, which would have the authority to recommend that WAPA officials be fired if they had not negotiated in good faith.
Making this law would be like putting a shotgun to the head of the WAPA executive director, Bruno-Vega said.
"This bill inhibits and prohibits WAPA from negotiating to get lower rates," Bruno-Vega told members of the Public Service Commission at a hearing Friday. "The only thing missing from this bill is the name of the company."
Speculation is that if the name of the company were attached to the amendment, that name would be Caribbean Energy Resources Corp., which received its PSC certification in February. Labor Commissioner Cecil Benjamin is on the record saying at a June 2004 Senate Labor and Veterans Affairs Committee meeting, "We … support the proposal submitted by Caribbean Energy Resources Corp. to construct an industrial complex on St. Croix." (See "WAPA Deal Key to Industrial Complex, Senators Told"). Jn Baptiste is chairman of that committee.
In that meeting, CERC officials told the legislators that WAPA was holding up its plans for building a complex on St. Croix by refusing to agree to purchase power from it.
Sen. Usie Richards at that meeting told WAPA Chief Operating Officer Glenn Rothgeb the authority was keeping job opportunities away from Crucians.
"I have a deep and abiding concern for the residents of St. Croix who are unemployed. The situation is totally unacceptable. It is imperative that we do something about it," Jn Baptiste said then.
The only other company currently certified by the PSC as a "small power producer," Caribe Waste Technologies, is suing WAPA, claiming that while the Turnbull administration had chosen it four years ago to build and operate a waste management system for the territory, WAPA stonewalled the project. (See "WAPA Sued Over Failure to Agree to Purchase Power"). CWT received its certification in July 2002. The suit, filed in July 2004, accuses WAPA of grievances ranging from breach of contract to fraud.
The third contender, the Renaissance Group, operating at the former V.I. Alumina plant on St. Croix, has applied for but not yet received certification from the PSC and therefore is presumed ineligible to compete under the terms of the new amendment, which calls for an agreement within 90 days of its enactment. Bruno-Vega, however, as recently as Oct. 1, said in a Frederiksted meeting with the PSC that Renaissance is the only qualified vendor that could provide energy in the short term. (See "PSC Denies WAPA Petition Concerning Bid Process").
The PSC had met with WAPA earlier in the week to discuss long-range plans for reducing its rates to consumers, who have had increase after increase within the last two years.
"Everything we are doing here is just an intellectual exercise, if this bill passes," Bruno-Vega told senators .
WAPA is currently in the process of sending out requests for proposals for the purchase of alternative sources of fuel. This has been an area of contention for WAPA, the PSC and CERC and CWT, both of which have insisted the authority should be required to purchase from them.
Bruno-Vega claims the best way to purchase power, which WAPA is required to do by law, is to go through the bidding process. The PSC claims, however, that WAPA can approach only companies it has already certified and has denied WAPA the right to go out and seek bids.
The amendment offered by Jn Baptiste Thursday was approved 13-1. Sens. Lorraine Berry, Douglas Canton Jr., Roosevelt David, Adlah "Foncie" Donastorg, Carlton Dowe, Jn Baptiste, David Jones, Almando "Rocky" Liburd, Shawn-Michael Malone, Luther Renee, Ronald Russell and Celestino White voted for the measure. Sen. Emmett Hansen II was absent. Sen. Louis Hill was the only senator voicing opposition to the measure.
"For the legislature to mandate that the Water and Power Authority do this and do that is putting a noose around its neck," Hill said Thursday, adding that WAPA has to be protected since it is solely owned by the people of the Virgin Islands.
But Jn Baptiste argued, "We have a critical unemployment situation in St. Croix that calls for drastic measures."

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