The first time representatives of the government's Water and Power Authority negotiating team and Southern Energy Inc. came to St. John to discuss their proposal, they met on short notice with two residents. That was Sunday. On the second try, Friday., a dozen St. Johnians heard details of the proposed bid to to sell 80 percent of WAPA to SEI, asked questions and got answers.
Licensing and Consumer Affairs Commissioner Andrew Rutnik, a member of the Turnbull administration's negotiating team, and George Gray, client manager for Georgia Power Co., a subsidiary of Southern Company, as is SEI, spoke to the St. John Rotary Club at its weekly luncheon at the Westin Resort.
Rutnik pledged that the SEI takeover would not send utility bills through the roof. He said performance goals spelled out in the proposal call for the new company to reduce power outages and to provide quick installation for new subscribers. "Very clearly defined outcomes have been laid out in this agreement," he said. "If Southern Energy doesn't achieve those outcomes, then the CPI can be reduced to zero."
He was referring to the consumer price index that represents the rate of inflation. Under the agreement, there will be no increases in electric or water rates for two years. For the next five years after that, electric rates can rise by up to three-quarters of the inflation rate. However, Rutnik said, the increase is tied to the specified performance standards. "The company will "receive no rate increases if the service doesn't improve," he said.
Jose Penn of Penn's Trucking was concerned about backup power and water for St. John. "They talk about a generator for power island wide and the production and distribution of water," he said. Noting that WAPA has a Request for Proposals out for a water line between St. Thomas and St. John, Penn said Gray and Rutnik offered assurances that "any responsibilities WAPA has they would have to pick up."
Gray said, "We looked at the steady-state operation of the Water and Power Authority. They do not have a generator over here." However, he said, Southern Energy has equipment that might allow for supplementary power in an emergency by hooking up under a partnership agreement with generators operating at hotels that aren't serving guests.
Rotarian Zena Matthias said she went into the meeting with an open mind. "I'm here to listen, and then I'll make my decision," she said. "WAPA is in trouble and we need help."
Gray also cited plans to conduct an assessment of the distribution system with an eye toward combatting brown-outs and power surges. He pointed out that any such plans associated with improving and expanding the utility's capabilities depend on ratification of the partnership by the Legislature.
In addition to giving details of the proposed sale, Gray shared what he said were insights gained from public meetings on St. Thomas and St. Croix in the past week. Attendance at those sessions "was good," he said. "We had about 60 to 70 people to both meetings. The questions were good. There's a lot of concern in the community when you ask someone to come in and partner. They hear about the 80 percent versus the 20 percent and they say, ‘Wait. This is not a partnership,'" he said.
Gray said a number of people have asked about where alternative energy fits into the picture for the proposed new company, V.I. Electric and Water. "We're working very diligently in the research area on the fuel-cell technology," he said. "We understand that this [the Virgin Islands] is a good area for alternative energy sources, specifically photovoltaic. The challenge to that is that it's still relatively expensive, if you're going to do it on a large basis."
Rutnik said the age-old proposal to set up a waste-to-energy conversion plant remains alive as a viable method of reducing solid waste in the territory and converting it into a cheap energy source.
