The V.I. Water and Power Authority governing board approved contract extensions and cost increases for several of its undergrounding projects on Thursday, mostly due to disruptions in supply chains that have plagued manufacturers since the COVID-19 pandemic.
Most of the extensions are for 60 days, to Feb. 28, according to a press release announcing the board’s decisions. They include:
— A cost increase of $300,288 and a time extension of 60 days ending Feb. 28 for Vivot Construction as it relates to the Golden Grove Underground Project (Contract SC-24-20). The additional cost to be incurred is a result of an increase in project material costs.
— A cost increase of $107,677.04, and a time extension of 60 days ending Feb. 28 for the Container Port Underground Electric Project (Contract SC-22-21). The additional cost is a result of field-issued directives and drawing modifications, while the time extension is due to ongoing supply chain challenges.
— A cost increase of $27,498 and a time extension of 60 days ending Feb. 28 for the Midland Underground Electric Project (Contract SC-23-20). Increased costs are a result of additional manhole grounding and rack proposal, while the time extension is being caused by longer lead times for electrical equipment on order.
— A no-cost time extension of Contract SC-02-21 from Dec. 31 to Feb. 28. The contract is for the audits of the electric and water financial statements for FY2019 and FY2020 as well as the single audits for FY2019 and FY2020. The time extension will allow additional time for the finalization of the single audit for FY2020. All other audits have been completed.
CEO Andrew Smith also provided board members with a brief update on the authority’s fuel situation, indicating it is currently spending $1.6 million per week in additional fuel costs based on the current diesel/propane energy mix for the islands versus operating with a full propane supply.
WAPA’s propane supplier, Vitol, announced it was suspending deliveries at the end of November due to payment dispute. The dispute with Vitol hinges on payment owed not for its propane deliveries but for the dual-fuel infrastructure Vitol helped bankroll in 2014 and 2016. The Virgin Islands and Vitol disagree on the total amount owed — Vitol contends more than $145 million, of which Smith has said WAPA has paid $76 million.
Until the matter is resolved, WAPA has been operating on diesel fuel, which is more expensive than propane. At an emergency meeting on Dec. 23, the board approved a temporary authorization to purchase spot-market, or short-term propane supply, through March 31.
That approval is key as it will allow the authority relief from 100 percent diesel utilization, WAPA announced in a press release.
Smith reiterated Thursday that efforts to secure additional propane supply to offset and lower fuel costs continue.