Base-Rate Increases Could Be Approved by July

Despite a push to approve a base-rate increase by June, a back-and-forth between the Public Services Commission and the V.I. Water and Power Authority has continued to delay the process, officials said during a special PSC meeting Wednesday night.

At the PSC’s last meeting, commission members said they had hoped to resolve the long-standing base rate issue by May, but ended up agreeing that they would have to tack at least another six weeks onto the process, which would have continued the matter into June.

But after several hours of discussion Wednesday, it appeared that there were still several outstanding issues causing delays, including a lack of information submitted to hearing examiner Bennett Chan, who was appointed two meetings ago to oversee the base rate case. At that time, conflict between the PSC and WAPA had caused the suspension of an interim base rate agreement and increase that WAPA said it needed in order to stabilize its operations.

The PSC first approved an 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 the agreement negotiated between the two parties. At that time, WAPA Executive Director Julio Rhymer said the agreement was acted on after only three days notice and with little to no time for the authority to review.

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Looking at the immediate impact of the PSC’s decision days later, Rhymer said the authority would have difficulty producing reliable power. Among other things, the increase was going to cover the leasing of two additional units that were meant to increase reliability and give WAPA the chance to overhaul and convert its Unit 23, which Rhymer said at the time was two years overdue for maintenance.

At the time, Rhymer said that he would be meeting with his legal team to discuss any other impacts or options and a few days after, WAPA announced that it would file a motion for reconsideration with the PSC that would allow WAPA to implement a base rate increase on Feb. 1.

The PSC had 30 days to act or WAPA’s petition of the matter would be considered denied, but at a meeting on February 22, the commission chose instead to refer the base rate portion of the case back to Chan, the hearing examiner.

During another PSC meeting in May, some members said that pushing the matter back would cause “irreparable damage” as WAPA worked to stabilize its power and put in place new generating equipment, but members David Hughes and Johan Clendinen said that giving it back to the hearing examiner would allow both sides to start from scratch.

At Wednesday’s meeting however, Chan said that recent meetings between the two sides continue to turn into “protracted arguments.”

“I’m not sure where there’s any place where the two parties don’t remain at odds,” he said. “We cannot even agree about what petition were working off of. It’s a constant argument every time we have a conference.”

The base right matter has been on and off before the PSC since 2015, and permanent base rates have remained unchanged since 2012. According to testimony in past hearings, the interim base rate increase was expected to result in approximately $14 million for the authority and on Wednesday, PSC consultants Georgetown Consulting Group said the permanent rates were expected to bring in more than another $20 million.

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