WAPA, PSC Look to Clarify Base Rate Issues

The recent back and forth between the V.I. Water and Power Authority and Public Services Commission continued Thursday as both sides issued releases trying to clarify WAPA’s decision to implement a base rate hike and the reason behind the PSC’s decision last week to rescind it.
The PSC first approved the interim base rate increase in early January, but voted two weeks later to rescind it after WAPA said it needed more time to go over the other items included in an interim base rate agreement negotiated between the two parties, which WAPA Executive Director Julio Rhymer said was acted on after only three days’ notice and with little time for the authority to review.
The PSC’s decision on Jan. 26 to rescind the increase also came after an hour-long discussion between both sides over a different petition for reconsideration filed by WAPA, during which some commission members dealt with the PSC’s jurisdiction to hire a specific consulting firm to evaluate whether WAPA had put in place certain recommendations that came out of a management audit conducted in 2014.
At the January meeting, WAPA said its issue was not with the PSC’s jurisdiction but the fact that it hired the same consulting firm for the evaluation as WAPA had hired to conduct the audit. The firm, Vantage Energy, has not been working with either side since the dispute started, according to PSC attorney Boyd Sprehn.
Two days later, WAPA board members looked at the immediate impacts of the PSC’s decision, which Rhymer said would most immediately hurt the authority’s ability to produce reliable power. Among other things, the increase was going toward the leasing of two additional units – Unit 25, which is on-island, and Unit 26, which is on its way to the territory – that were meant to increase reliability and give WAPA a chance to overhaul and convert Unit 23, which Rhymer said is two years overdue for maintenance.
Rhymer said that he would also be meeting with his legal team to discuss any other impacts or options and, a few days after, WAPA announced that it would be filing a motion for reconsideration with the PSC that would allow WAPA to implement the base rate increase on Feb. 1.
Rhymer reiterated WAPA’s position in a release Thursday and challenged statements issued by the PSC last week that WAPA was simply upset over the PSC’s decision to hire Vantage and set rates.
“The rescission of the rate increase violated the Sunshine Act and the 10-day statutory notice requirement that the PSC must comply with before holding a meeting on an issue,” Rhymer said Thursday. “The PSC also acted in violation of previous Superior Court rulings WAPA obtained in 2006, requiring a 10-day notice of a PSC meeting be given to WAPA along with the opportunity to be heard at meetings of the commission.”
Rhymer also said in the release that the authority is able, by law, to appeal any PSC decision and that it is what WAPA was doing on Jan. 26 when filed its initial motion for reconsideration.
Rhymer also went over the new rates, which have increased by approximately 13 percent.
“For all residential customers, the interim rate increase would only apply to consumption of more than 250 kilowatt hours,” he explained. “The first 250 kilowatt hours of usage, while not affected by the interim base rate increase, will undergo a $7 increase resulting from the transfer of LPG-related charges to the base rate from the LEAC (Levelized Energy Adjustment Clause). The LPG (liquefied propane gas) related charges include maintenance and infrastructure fees, reflecting the substantial completion of LPG facilities in both districts.”
All residential customers using more than 250 kilowatt hours will see an average monthly increase of $16. Commercial customers using 1,200 kilowatt hours per month will see an increase of $78.64.
The PSC has acknowledged receipt of WAPA’s newest motion for reconsideration and said that, by law, the filing of such a motion allows the PSC’s decision to be stayed for up to 30 days. That means that the original order implementing the interim base rate increase remains in effect until the PSC acts. And if the commission doesn’t meet by March 2, WAPA’s petition is denied and therefore would not be able to continue the increase, according to a statement released Thursday.
According to the statement, the PSC has received from WAPA some of the information required in the interim rate agreement, but still has not received the evidence it needs – including extended lease agreements for the two new rental units an executed lease or purchase order for three new generators – that would push them to approve the new rates.  
“A statement was issued from the PSC to WAPA that they must comply with the interim rate plan and submit the required evidence, or issue public notice that the rate increase will not be going into effect at this time,” according to the PSC on Thursday. “The commission is reviewing the petition for reconsideration and will continue to act deliberately, prudently and reasonably based on facts and the law before it.”

 

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