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HomeNewsArchivesWAPA Counting On Bond Proceeds for New St. Croix Substations

WAPA Counting On Bond Proceeds for New St. Croix Substations

WAPA Chief Operating Officer Gregory Rhymer (center) talks about capital improvement plans while Director of Corporate Services Norris Griffin (left) and General Counsel Lorelei Farrington listen in.With up to $48 million in bond proceeds expected soon, the V.I. Water and Power Authority’s governing board approved using $20 million for two new substations on St. Croix. During the board’s regular monthly meeting Thursday, WAPA Chief Operating Officer Gregory Rhymer said a $12 million replacement substation at Estate Richmond was necessary for the waste-to-energy plant Alpine Energy Group will be building on the island. But it – and a second $8 million substation mid-island – would be necessary regardless in order to improve the efficiency of the island’s grid and reduce line loss.
When board member Noel Loftus asked if any more substations would be needed on the eastern end of the island, Rhymer responded that a new Richmond substation should be able to accommodate any likely increased power demand out east, as most of the population growth has been on the western end of the island, thus necessitating the mid-island substation.
The board also approved a slew of major capital projects to be financed by the bonds, assuming all goes well with refinancing and the revenue materializes.
Some $4.4 million will pay for a third submarine cable to St. John, adding redundancy to its grid, making power outages less likely and more containable, and providing capacity to handle eventually bringing the British Virgin Islands onto the same grid.
New transmission and distribution dispatch centers on St. Thomas and St. Croix will get about $8 million of the package. Another $3 million will go to relocate the line departments on all three islands, and $3.9 million will go to build a new administrative building. Over time, having its own administration buildings will save money currently spent on rent to other government agencies, Rhymer said.
As the St. Croix waste-heat recovery boiler comes online later this year, $3 million will cover the cost of converting over from water to steam-injection systems for two of the generators. The injection systems help to clean out nitrous oxide and other pollutants from the generators, reducing hazardous emissions. Because the steam is distilled and does not shock the system with a sharp temperature change, Rhymer said steam will "reduce wear and tear on the equipment," greatly reducing maintenance costs. He added that it would also lower emissions somewhat and improving the efficiency of the plant.
A new double-walled fuel tank will cost $3 million and upgrades to another quarter-million-gallon tank will take another $1.4 million.
All of these projects are in the planning stages and are contingent upon the bond revenue.
The board also approved spending an additional $2.2 million to the consulting firm Skadden, Arps, Slate, Meagher and Flom for technical and legal services. The firm helped with technical analysis of alternative energy proposals, evaluation of bids, negotiation and writing of contracts. It also has and will be giving testimony to the V.I. Legislature and to town hall meetings, answering technical questions.
Board member Robert Mathes, who is also Commissioner of Planning and Natural Resources, questioned the amount, asking how the billing was broken down and audited by WAPA and whether any of it could be done in-house for less.
"Oh no, these guys at Skadden Arps are utilities experts of a very high order in a very rare field," said board member Gerald Groner. "Not only is there no one at WAPA, but really very few experts of that quality in the utility field able to do that."
WAPA’s general counsel, Lorelei Farrington, agreed, saying they had to be able to tailor highly technical testimony about each of several different technologies.
"It was really a tremendous amount of work they did," Farrington said. She personally audited their detailed bills, she said.
The board approved the bill, with Mathes voting no and board member Wayne Biggs abstaining. Voting yea were Groner, Loftus, Kenneth Hermon and Chairwoman Juanita Young. Brenda Benjamin, Cheryl Boynes-Jackson and Donald Francois were absent.
In other business, the board approved purchasing three used bucket trucks, one digger derrick and a pressure digger for $585,000. In September the board approved $812,000 to buy two bucket trucks and a digger truck, but since then, staff found the less expensive used vehicles, allowing WAPA to purchase more vehicles for less money.
Also, the board authorized:
— a new three-year contract for up to $6 million with Ambient Technologies to operate and maintain WAPA’s desalination units;
— renewal of liability insurance policies with AEGIS Corp. for $1.2 million for 2010; and
— Executive Director Hugo Hodge Jr. to negotiate sale of a quarter-acre plot of land in Hannah’s Rest to the Kama Kris hardware store.

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