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Monday, July 4, 2022
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PSC Approves Slight Increase in Electric Rate

The Public Services Commission on Thursday approved a slight increase in the V.I. Water Authority’s base electric rates, but that could change within the next 30 days. The commission decided to leave the base water rate alone for now.

The decision came after a confusing back and forth meeting Thursday night, at which WAPA and PSC officials – along with the hearing examiner assigned to the base rate case – all appeared to disagree with each other on how much WAPA needs to pay its bills.

In the end, the PSC allowed for $4.3 million increase in WAPA’s yearly revenues, which would increase, according to authority officials, the base electric rate by approximately six-tenths of a cent.

WAPA’s base rate case goes back about a year, when the authority petitioned the PSC for an increase of $18 million in its yearly revenues, which they estimated would require a 2.5 cent per kilowatt hour increase to the base rate and would amount to $10 per month more for the average customer. The authority has since amended that figure to $15.6 million, and is also seeking to make permanent an interim revenue increase of $8.6 million, which had been granted on July 6, 2012. This amount is already represented in ratepayers’ bills.

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WAPA has said that the base electric rate increase would, among other things, allow the authority to re-pay a $10 million inter-company loan owed to the electric system and a $2.5 million line of credit.

Speaking during Thursday’s meeting, base rate hearing examiner Kye Walker, along with PSC board members and their technical consultants, all presented different recommendations on what WAPA should get – along with different recommendations on what WAPA should be allowed to recover through the increase.

In its filing, WAPA used 2011 figures and expenses, including energy sales, fuel costs, salary costs, and debt service payments, among other things. During Thursday’s meeting, the PSC said the only amount undisputed between the parties was the $4.3 million WAPA allowed for capital improvements and working cash.

Other than that, PSC attorney Tanisha Bailey-Roka said, many of the other figures still needed to be clarified.

"We hand this matter back to the hearing examiner and parties, to clarify these and all other outstanding issues within 30 days," Bailey-Roka said. Within that time, the PSC would review the revised hearing examiner’s report on the water system proposal, which Bailey-Roka said the commission received at the start of Thursday’s meeting.

Until then, the current base water rate would stay in place, she added.

WAPA Executive Director Hugo Hodge Jr. warned the PSC against further delaying the vote on the increase, as it could have a negative impact on the authority’s bond ratings and even jeopardize the authority’s current efforts to diversify its energy portfolio with propane.

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