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Senators Hear of Renewable Power from Nevis

June 24, 2009 — No vote was taken Wednesday on a bill giving the V.I. Water and Power Authority the ability to float up to $800 million in bonds to build renewable energy plants, but senators were updated on ongoing efforts to bring new energy technology to the territory.
A presentation was given during Wednesday's Economic Development, Energy and Technology Committee meeting by representatives from Nevis, who told senators that U.S. Energy Department studies conducted on the island about a decade ago revealed a large geothermal energy source that they said could be channeled to the territory via submarine cable.
"The studies concluded that Nevis has a potential for approximately 900 megawatts of geothermal energy," said Carlisle Powell, a junior minister with the Nevis government. "To put this into context, our present electricity base load is approximately 6.5 megawatts; we peak around nine megawatts."
That leaves more than enough excess power for other neighboring islands, he added.
Nevis, a 36 square-mile island with a population of about 12,500, uses imported diesel instead of oil to produce electricity, Powell said. Two years ago, the Nevis Electricity Company (NEVLEC) spent more than $8.1 million on diesel, and a year later, the bill jumped to more than $12.3 million, he said.
In January 2007, the government granted West Indies Power Ltd a license to explore for geothermal energy, with drilling staring a year later. In June 2008 the first signs of "major steam flow" were evident, Powell said. Legislation was passed, and two months ago, a power purchase agreement was signed between NEVLEC and West Indies Power, along with a contract between the Nevis government and West Indies Power.
The agreements allow West Indies Power to harness power from the three-mile long geothermal reservoir they've discovered and sell it on the domestic and regional markets, Powell said. It's anticipated that by next year, geothermal energy will cover the island's entire base load. St. Kitts should be in the system in 2011. The U.S. Virgin Islands could be getting power from Nevis around 2014 if a power purchase agreement with WAPA is signed, he said.
West Indies Power is one of the alternative energy companies in negotiations with WAPA, according to the authority's Executive Director Hugo Hodge Jr. In December 2007, the authority put out the call for alternative providers that could supply up to 20 megawatts of power during peak hours and up to eight megawatts during off-peak hours.
"Within the next few weeks, we will be announcing results that will replace approximately 35 percent of our current generation output with renewable and alternative sources," Hodge said Wednesday. "Territorywide, approximately eight to 10 percent of our current generation output could potentially result from renewable energy sources. This is in addition to our net metering initiative, which has the potential for replacing an additional 10 percent of energy generated from renewable sources."
Turning his attention back to the bonding bill, which would also increase WAPA's bonding limit from the current $500 million to $1.3 billion, Hodge said the Senate's effort was well intentioned but the utility currently doesn't have enough revenues to support the debt.
"The only source of repayment for the bonding obligations is the money we receive from our customers for potable water and electric power services that we provide," he explained. "Therefore, the debt service on any additional borrowing will have to be passed through to our electric system customers."
In short, the authority would need to bring in an extra $64.2 million a year, which would add $44.03 per month to the average electric customer's bill and $105.56 per month to the average commercial customer's monthly bill, Hodge said.
In other news, the committee approved a bill calling for the Economic Development Commission to copy the Legislature on all recommendations granting tax benefits to potential EDC beneficiaries. The recommendations already go to the governor for approval, but the Senate would also like to have the information to make sure the companies are complying with all provisions in their certificate, said Sen. Nereida Rivera-O'Reilly.
Economic Development Authority head Percival Clouden said confidential information in the applications may be "inadvertently revealed" if the bill were passed. The commission is already required by law to submit annual reports to the Senate, which contain summaries of the commission's actions, and data on outstanding EDC benefits and beneficiaries, he added.
But senators stood their ground.
"This entity is so important to the Virgin Islands, especially in these hard economic times," said bill sponsor Sen. Michael Thurland. "We need transparency, and for us just to look over this information right now is just so important. This body should be copied on what's sent to the governor and not have to request the information from the EDA."
Voting to move the bill on to the Rules and Judiciary Committee were Sens. Craig W. Barshinger, Louis P. Hill, Neville James, Rivera-O'Reilly, Sammuel Sanes and Thurland.
Present Wednesday were Barshinger,Sen. Adlah "Foncie" Donastorg, Hill, James, Rivera-O'Reilly, Sanes, Thurland and Celestino A. White Sr.

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