Jan. 9, 2009 — The V.I. Water and Power Authority is in the final stages of negotiations with several companies competing to provide up to 20 megawatts of electricity from alternative sources, rather than fuel oil.
In December 2007, as petroleum prices were rising, WAPA issued a formal request for proposal, inviting close to a hundred companies to submit alternate energy plans. (See: "WAPA Looking for Alternative-Energy Providers to Supplement Power Production.")
In June 2008, WAPA began final review and discussions of a short list of finalists that had the greatest potential to reduce electricity costs and decrease WAPA’s dependence on oil and its erratic prices. WAPA's technical review of the proposals and detailed negotiations of power purchase agreements and interconnection agreements with the final competitors is nearly complete, according to a statement issued by WAPA Friday.
Now the utility anticipates entering into definitive agreements in the next three months to purchase energy from one or more provider to provide a guaranteed monthly supply of energy at a cost lower than WAPA’s projected energy costs, officials said in the release.
WAPA had originally anticipated concluding these agreements by the end of 2008, but progress was slowed by the recent disruptions in the credit markets, instability in the oil markets, and the need for the finalists to negotiate and contract with third parties to support their proposals.
The technologies proposed by the finalists are waste-to-energy, coal, geothermal, and ocean thermal energy conversion (OTEC). A proposal for a combined wind and solar facility has been withdrawn due to the proponent’s difficulty in obtaining financing, according to WAPA.
In a statement, WAPA Executive Director Hugo V. Hodge Jr. said that the proposals selected for final negotiations offer the best prospects to diversify WAPA's fuel mix and to mitigate the potential impact of future increases in oil prices. As the new year begins, WAPA is diligently working to complete the process, and is optimistic about the diversification of WAPA’s energy portfolio, Hodge said.
Due to the confidential nature of the on-going commercial negotiations, Hodge said WAPA is unable to provide details of the negotiations with each project but will immediately announce the results as soon as negotiations conclude.
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