Virgin Islanders frustrated with ongoing electric blackouts plaguing the territory in recent months heard Gov. Albert Bryan Jr. on Tuesday list reasons for the failure of the V.I. Water and Power Authority, including forces of nature, and outline how his energy task force hopefully will help the utility become a viable and financially stable power provider for the first time.
At his weekly press briefing, Bryan said WAPA continues to have financial problems for a number of reasons – non-payment by government agencies, expenses that surpass revenue, decades-old equipment and extreme weather. It’s a “very complex situation with significant challenges,” he said.
On April 22, the governor declared a local State of Emergency due to the “plaguing issues” with WAPA and the lack of energy security. On May 22, he extended declaration for another 30 days. The new state of emergency expires on June 21. If it needs to be extended again, then the Legislature would have to give its approval.
The government, though a multi-agency energy task force, has been meeting daily to come up with solutions to dig the utility out of the mud. After paying WAPA more than $10 million for both hospitals’ and V.I. Waste Management Authority’s overdue bills from the budget stabilization fund, the governor said the task force – including the V.I. Territorial Emergency Management Agency, V.I. Human Services, Office of Management and Budget, Fire Service, V.I. Health Department and the V.I. Police Department, among others, are now working on solutions that would give WAPA new options with which to pay its bills regularly, meet obligations to bond holders and generate revenues.
“The administration didn’t cause these issues,” Bryan said. “So if I have to suspend the board, appoint a new CEO, appoint new personnel, whatever it is that I have to do to get things fixed, is going to get done,” the governor said at the end of the briefing.
Jenifer O’Neal, OMB director and incident commander for the state of emergency said she also has been working with government partners to convince Wartsila to install four generators under contract, to pay Seven Seas Water for reverse osmosis plants, and renegotiate fuel transportation costs with Vitol.
“All things considered, we expect Wartsila to restart in 30 days,” she said, adding that within the first 30 days of meeting, incident command discovered, among other things, a court order that froze $6 million in WAPA accounts under Banco Popular and Firstbank, along with a total $21 million per month owed to vendors, while the utility continues to bring in about $19 million a month. O’Neal said that the freeze at Banco Popular has since been lifted and that WAPA’s attorneys continue to process documents to also improve the situation at Firstbank.
Hopefully, in mid-July, the V.I. Housing Finance Authority will close on $145 million in financing from U.S. Housing and Urban Development to purchase Vitol propane terminals and retire the VITOL debt, O’Neal announced.
Additionally, O’Neal said negotiations with Vitol have led to lower propane prices for nine months, from $.73 to $.595 per month per kilowatt hour, which will reduce fuel costs around $900,000 a month. The governor pointed out that WAPA sells electricity to ratepayers for $.43 a month per kilowatt hour – an immediate loss to the bottom line.
Communications are ongoing with solar provider V.I. Electron, which is building a solar farm to power 30,000 homes and will be online in July, reducing the cost to residents. V.I. Electron plans to build more solar facilities in the territory to reduce customer cost even more.
O’Neal said that her incident command will continue to meet daily and work with the governor to engage a turn-around management company in the next 30 days to help WAPA reduce debt and function as it should. She said they will continue to monitor the ongoing projects and look for other ways to increase financial stability.
“There’s no private company coming to buy WAPA and its problems. We must fix it ourselves,” Bryan said.
The article fails to mention how much V.I. Electron will be charging WAPA for the power they produce. Presumably, it will be at a better rate than generators can provide. And, of course, that will only be during sunshine, unless they are adding batteries. One has to ask why WAPA doesn’t install solar on their own – it would pay for itself in 6-8 years.