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WAPA Says Government Debt Hurts Utility

Jan. 20, 2005 – The V.I. Water and Power Authority's governing board wants $15 million owed by the territory's government.
During its meeting in St. Croix Thursday, the board authorized management to draft a policy rejecting any application for new service by any governmental agency until the government's account is brought current or it submits to a "serious" payment plan.
"This is the first measure that WAPA is taking to prevent the government debt from increasing," Alberto Bruno-Vega, WAPA's executive director, said.
According to a release from the utility Nellon Bowry, WAPA's chief financial officer, told the board WAPA's cash position is deteriorating.
" The high government account receivables along with under-recovered fuel costs of $19 million have placed a stranglehold on the Authority," Bowry said, adding the utility only had two weeks worth of operating cash on hand.
The $34 million cash deficiency is hampering the day-to-day operations of the authority, impacting its ability to pay vendors and undertake "critically needed" maintenance projects, the release stated.
The board approved the implementation of the Phase II General System Reliability Improvements in the amount of $20 million.
Bruno-Vega told the board that several of the improvement projects hinged on the $15 million owed by the government.
"These monies are needed to improve the infrastructure of facilities in St. Croix as well as St. Thomas-St. John," Bruno-Vega said.
Bruno-Vega said the utility has $500,000 remaining from the installation of the St. John submarine cables, and the money will be utilized for improvements on St. Croix.
Of the $500,000 WAPA will use for St. Croix, $275,000 will go toward the upgrade of lighting arrestors and other equipment, $80,000 will go towards the construction of a concrete building around the station service switchgear to protect it from the rain, and the rest will be used to conduct studies on fine tuning the generators.
The $15 million, if received from the government, will fund the following projects:
– $3.6 million for a new substation in St. Croix,
– $1.2 million for two transformers for the substation,
– $1.5 million for a new underground feeder from the Richmond Plant to Christiansted,
– $400,000 per year to hire additional crews for tree trimming to protect electrical wires,
– $5.5 million for a 10-million-gallon water tank for Orange Grove,
– $5.5 million for a 10-million-gallon water tank for Red Hook to supply the East End and St. John,
– $3 million for a Long Bay substation to supply the Yacht Haven Hotel, which will add another 10 megawatts of power to the electrical system. Yacht Haven has agreed to contribute $3 million towards the substation, which will cost $6 million.
"We need assistance from the government and central instrumentalities in bringing about these improvements," Bruno-Vega said, adding WAPA could not carry them out if the government does not pay its debt to the utility.
The WAPA board also heard from Harris Group Inc., which conducted an assessment study on the utility's generating systems.
The consultants recommended several cost-cutting and efficiency measures. Most highly recommended was the immediate installation of a waste heat recovery boiler on St. Croix. Other technologies evaluated included biomass, wind power, combustion turbine with heat recovery steam generators, petroleum coke and diesel units among others, the release stated.
The board also agreed to meet with V.I. Inspector General Steven van Beverhoudt concerning the audit reports and to schedule a meeting with the Juan Luis Hospital Board about its delinquent accounts receivables.
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