Gov. John deJongh Jr. has written to the Environmental Protection Agency requesting guidance and support as the territory works to break its dependence on fuel oil, asking that the federal agency not impose heavy fines for air quality violations so that the V.I. Water and Power Authority can focus its resources on converting its generators from fuel oil to cleaner, less expensive gas.
In his letter released Tuesday by Government House, deJongh asked Judith Enck, regional administrator of the EPA, to help facilitate the issuance of required environmental permits over the next few weeks to enable WAPA to convert its power and water generating facilities to use new fuel sources. Both officials discussed deJongh’s request during a meeting held in New York last week.
“This is a major environmental and economic initiative for WAPA and our community,” deJongh wrote. “This is a path that your agency has strongly encouraged and I am seeking the help and guidance of you and your staff in expediting this effort.”
In the letter, the governor outlined WAPA’s efforts over the last few years to evaluate the technical and economic hurdles to implementing new energy sources that could replace oil. Wind, waste-to-energy, hydro-current, liquefied natural gas, solar panels, as well as an undersea cable between the Virgin Islands and Puerto Rico all have been studied.
Because of these initiatives, within the next year WAPA will have some 18 megawatts of solar generation available on St. Thomas and St. Croix, the release indicated. The authority is also seeking bids for utility-scale wind generators and plans to continue working with third parties to implement waste-to-energy power production.
The assessment of LNG conversion has shown tremendous potential, according to the Government House news release, partially due to a significant reduction in the price of natural gas due to fracking. Liquefied petroleum gas is also a viable option, especially for the interim period before natural gas is fully implemented, and possibly for permanent use, according to the governor.
“Based on these factors, the authority is moving forward aggressively to the use of LPG, as the first and initial step, and then to LNG for its energy needs. As you know, this conversion will significantly improve air quality, facilitate and greatly simplify compliance with EPA’s air permitting requirements, and holds promise to substantially reduce the cost of power for all classes of ratepayers in the U.S. Virgin Islands,” the governor wrote.
The feasibility evaluations, which required the allocation of tremendous resources from the Virgin Islands government, were based on discussions held early last year with Enck and other EPA officials. As the study was taking place, WAPA’s staff simultaneously drafted fuel requirements for a new fuel supplier, issued a request for proposal, evaluated the responders and negotiated a new agreement in advance of the expiration of the current agreement with HOVENSA.
In the next few weeks, WAPA should complete negotiations with a provider of LPG, deJongh said. The authority will then begin to rapidly convert its facilities to the new fuel source once environmental air permitting requirements are resolved.
“It will not be possible to finalize the necessary contracts until that is done. So an expedited review by EPA is critically important,” deJongh wrote the EPA administrator, requesting Enck approve the waiver of any new source review so as not to substantially delay the conversion.
“It is the guidance of WAPA’s environmental advisors that no federal air permitting is required due to the fact that the fuel conversion will lower emissions whenever fuel-oil burning is displaced and that limitations on future facility operations will further ensure that no significant net increase in emissions will result from the conversion,” deJongh wrote. “Consequently WAPA is confident that it can quickly satisfy any concerns that EPA might have in this regard during the expedited review of the authority’s submissions.”
Natural gas is more technically complex to implement, so WAPA will proceed on a slower path in arranging for conversion to LNG, the release suggested. Because natural gas emissions are even lower than those of LPG, WAPA officials anticipate that the resolution of air permitting issues for LPG will also resolve all issues related to LNG.
In his letter, the governor said the cost of converting eight turbines to burn the lower cost fuel will be about $21 million. In addition, infrastructure to transport, deliver, store and convert the liquefied fuels so they can be burned in the generators will cost at least $300 million, and possibly as much as $500 million, the governor wrote.
“Because of the extremely limited resources of our citizens (and, therefore, the authority), the severe economic strains of the recent economic downturn, and the even more devastating impact of the closure of the Hovensa refinery, I would strongly urge the EPA to exercise its significant discretion to not impose large penalties on the authority for its past air violations, but to permit it to devote their limited resources, essentially local taxpayers monies, to the fuel conversion that will serve to remedy its past air emission compliance problems and substantially improve air quality in the territory,” deJongh wrote.