Whether Island Wind Power, the company that installed wind turbines at the Tutu Park Mall, should be a regulated public utility was the subject of a short hearing Friday at Public Services Commission headquarters on St. Thomas.
The hearing consisted of testimony from one witness, James Crist, an energy consultant with several local clients in the territory. Throughout the day, Crist was adamant that regulating IWP would set a dangerous precedent for the territory, saying that federal law exempts such private companies — or in this case, qualifying facilities or small power producers — from regulation in an effort to grow the renewable energy industry.
To regulate a company whose two 50 kilowatt wind turbines displace about 8 percent of the mall’s power load would mean than any other small private entity — whether it be marinas or local landlords — would be subject to the same restrictions as big companies such as the V.I. Water and Power Authority that supply to multiple clients, he said.
"These private parties could be instrumental in developing new technology and helping a new industry grow," he said.
WAPA’s argument has been that IWP has known all along that it is a public utility and tried to hide that fact by "concealing" its relationship with Tutu Park. When the company first applied to the PSC for qualified facility status, it said that it would be leasing the turbines to the mall, but later said it would be selling the mall power produced by the turbines at a substantially lower price than WAPA’s, WAPA attorney Samuel Hall said Friday.
IWP and WAPA have already entered into an interconnection agreement because the turbines need to be “excited” or “touch the grid.” While the turbines do not draw energy from the grid, they do use it to level the delivery of power.
It’s the selling of the power that’s caused conflict, Hall explained.
"The sale of power to any other party is what subjects you to regulation," he added. "We have made it very clear that if this involves the selling of power, then we would oppose. It was because of this that they deliberately concealed their relationship."
Meanwhile, Hall said there is currently nothing in local statutes that exempt qualified facilities from regulation.
Crist said that’s because the issue has never really been on the front burner. He explained that decades ago, the territory adopted in large part language included in the federal Public Utility Regulatory Policy Act (PURPA), but has not kept up to date with changes made to the act over the years — including the exemption for qualified facilities.
It can’t be the Legislature’s intent to continue to implement laws that are decades old, Crist added.
"Because these issues have not been percolating up, they haven’t been very important," he said. "But they’re percolating up now. This is the opportunity to look at how PURPA is being implemented in other areas so this kind of positive development can occur here."
Crist added that the territory’s definition of "public utility" is "very narrow" and is not usually applied in the States to a company supplying power to only one entity.
Countering the argument, Hall said there are exemptions in the code to retailers delivering services, such as water companies, and that local case law, with precedents set in the late 1980s, supports WAPA’s argument.
"The law needs to be refreshed," Crist responded. "And if you’re hanging your hat on that, it’s a shame."
He said the PSC can push for clarity in the law that "points out the ridiculousness of having one windmill become a public utility."
The decision on whether IWP will be regulated might not be decided for another month or so. PSC hearing examiner Rosalie Simmonds-Ballentine said Friday that briefs from both sides are due by June 4, while replies are due on June 14.