The government’s role in regulating the V.I. Water and Power Authority was debated Wednesday as the Senate Committee on Government Operations, Energy and Veterans Affairs considered three bills.
Bill 29-0243 would change the makeup of the WAPA board. Currently the board is comprised of 6 nongovernmental members appointed by the governor with the consent of the legislature and three government members chosen independently by the governor from his cabinet heads.
The bill would reduce the number of government members to two and the seven remaining nongovernmental members would be elected in the general election rather than being appointed.
WAPA Chief Executive Officer Hugo Hodge Jr. strongly opposed the bill in his testimony to the committee.
Hodge pointed out that the bill does not specify any requirements for candidates. He says that under the current system, the appointees are vetted for relative experience in engineering and finance.
“While the current process is intended to assure a board consisting of members with a well-rounded skill set to include public utility experience or expertise, this bill in its current form would reject this objective in favor of a structure that would, in the final analysis, be a popularity contest,” Hodge said.
He went on to argue that such a change would harm WAPA’s bond rating.
Hodge said such a change “further serves to create the impression in the bond market that the authority’s operation is unstable, subject to the changeable political winds of our island.”
Donald Cole, Chair of the Virgin Islands Public Service Commission, also testified against the bill, arguing that such a change would be “highly problematic and in many ways troubling.”
Cole argued that WAPA’s decisions were often unpopular, but necessary. He said if the board members were concerned about reelection, they may be unwilling to make decisions necessary to keep the authority functioning.
The bill was written by Sen. Nereida “Nellie” Rivera-O’Reilly and sponsored in the committee by Sen. Terrence “Positive” Nelson. Rivera-O’Reilly is not a member of the committee and thus could not vote.
Rivera-O’Reilly argued that the bill was a necessary step in bringing greater transparency and accountability to WAPA.
Sens. Nelson and Millen-Young voted in favor of the bill with Sen. Alicia “Chucky” Hansen voting no and Sen. Usie R. Richards abstaining. It will now move to the Rules Committee.
A second bill written by Rivera-O’Reilly proposed to limit WAPA’s ability to “back bill” consumers.
Back billing occurs whenever a consumer is unintentionally undercharged due to a mistake by meter readers or a malfunction in the meter itself. When WAPA discovers the error, they issue the customer a bill for the difference between what they paid and what WAPA estimates their actual usage was.
Currently there is no time limit for WAPA to catch these mistakes and seek payment. Several of the senators recounted claims by their constituents of receiving back bills for thousands of dollars due to meters that have been malfunctioning for over a year.
Bill 29-0260 would limit WAPA’s ability to back bill to three billing periods.
Hodge opposed the bill, saying that it could result in a loss of hundreds of thousands of dollars in revenue.
He acknowledged that back billing was frustrating for consumers, but argued that it was not unfair.
“When the authority back bills a customer, it is not charging the customer for any additional consumption, but is instead seeking only to collect for consumption or services that have already been used by the customer,” he said. “Hence the customer is not unfairly being charged for a service they have not received.”
Hodge went on to argue that it would not be feasible to catch all billing mistakes within three billing periods.
Nelson questioned Hodge on this point, inquiring whether WAPA was pursuing an upgrade to its system that would allow remote meter reading and thereby allow it to more quickly spot errors. Hugo said that they were, but they did not yet have financing in place for the upgrade.
Nelson characterized his support of the bill as an incentive for WAPA to push through the project.
“WAPA needs to modernize,” he said.
Sens. Nelson, Hansen and Richards voted yes on the bill with Millen-Young voting against it. The bill will now move to the Rules Committee.
A final bill introduced by Hansen would prevent WAPA from cutting off services during the month of December. Hansen argued that ratepayers should be given a grace period during the Christmas season.
“I don’t think this is a time of the year that people should be disconnected.”
During the debate, the senators drifted from the issue of December disconnections, and the debate became a general argument about the role of WAPA.
Sen. Rivera-O’Reilly construed WAPA’s opposition to the bills as a “resistance to change.”
She dismissed Hodge’s warnings about bond rating implications, saying it was her job to advocate for ratepayers, not bondholders.
“At what point do the ratepayers become the focus?” she asked.
Sen. Millen-Young criticized the LEAC, but voiced opposition to passing too many regulations on WAPA.
“We know that WAPA is a vexing issue, but do we cripple it?”
Hodge continued to reiterate his opinion that the local government was becoming too involved in the management of WAPA.
“This constant urge to over-legislate the authority could eventually lead the bondholders to conclude that it is the legislature, as opposed to the governing board and authority management, that is operating the day to day affairs of the authority,” Hodge said.
He told the senators that he was contractually bound to report to bond holders any developments that might impact the authority’s revenues, and these bills constituted such a change. He warned that some bondholders may demand their money back.
Hansen called for a vote on Bill 29-0264, but Sen. Richards had already left, so the committee lacked quorum.
Absent from the hearings were Sens. Ronald E. Russell, Alvin L. Williams and Celestino A. White.
