The Virgin Islands Water and Power Authority has been navigating a complex landscape of operational needs and strategic decisions, as seen in a series of recent board meetings. From contract negotiations to budget planning and infrastructure improvements, the utility provider has sought stability and efficiency in its services amid a challenging economic and operational environment.
During WAPA’s Governing Board meeting on Thursday, a new three-year contract with Solar Petroleum USVI Ltd. was a focal point of discussions. The agreement is designed to provide WAPA with the flexibility to secure emergency fuel supplies, especially during critical situations like hurricanes, and will allow it to purchase fuel incrementally, making it easier to manage cash flow while maintaining a steady power supply to its plants.
“It just adds another tool in the toolbox,” said CEO Karl Knight. He emphasized the importance of this contract in maintaining operational reliability, especially when typical fuel deliveries are disrupted due to weather or other unforeseen events. Knight said new agreement allows WAPA to make real-time decisions about fuel purchases, ensuring that the utility can meet short-term needs without overextending its budget.
WAPA’s employee benefits were also under scrutiny as the board addressed renewing health plans for 2025. The negotiation process with Cigna led to a 8.4 percent increase, down from the initial proposal of 27.6 percent.
The renewal plan includes enhancements such as reduced out-of-pocket expenses for retirees and improved life insurance coverage. According to Christian Bergstrom, a senior consultant with the Gehring Group, “Employees will have the opportunity to enroll in higher coverage amounts without evidence of insurability, a major improvement from previous years.”
WAPA has also focused on its fiscal planning for the coming year as part of its broader strategy. The board approved a zero-surplus budget for WAPA’s electric and water divisions for fiscal year 2025 that was crafted after a comprehensive review of departmental needs and included strategic forecasting to address critical operational areas. Quarterly reviews have been planned, allowing for adjustments based on real-time market conditions, particularly in fuel prices, which have been a persistent concern.
Interim Chief Financial Officer Elaine Kelly highlighted the need for adaptability, saying, “We are implementing a new quarterly review process to ensure we remain on track throughout the year, adjusting as necessary to meet our goals.”
Beyond its operational planning, WAPA is investing significantly in infrastructure to improve service reliability, the board heard. Projects at the Richmond plant on St. Croix and the Harley plant on St. Thomas are underway, including upgrades to cooling systems and explorations into alternative greenfield opportunities. These efforts are expected to enhance the efficiency and flexibility of WAPA’s power generation capabilities.
Perhaps the most promising development is the near completion of Phase 2 of the Wartsila project, which could significantly boost power generation on St. Croix. Knight noted that the project was “rounding third base and heading for home,” signaling that residents might soon see the benefits of these upgrades in the form of fewer outages and, eventually, reduced energy rates.
Community engagement has also been a priority for WAPA, especially during Energy Awareness Month. The utility has been active in local schools, educating students about energy efficiency and sustainability. These initiatives, which included demonstrations by WAPA linemen, aim to foster a deeper understanding of how energy is produced and delivered, building trust and support within the community.
Despite these positive strides, WAPA continues to face numerous challenges, particularly in managing procurement processes and adapting to market shifts. The local government’s extension of the state of emergency, originally declared due to WAPA’s financial difficulties, has provided critical support, underscoring the need for continued investment in infrastructure to safeguard energy supplies. According to Knight, focusing on fuel procurement, infrastructure upgrades, and employee welfare are all parts of a cohesive strategy to stabilize operations and lay the groundwork for a more reliable future.
“It’s been a long road, but we are confident that the steps we are taking now will lead to greater operational stability and, eventually, lower costs for our customers,” said Knight.
While WAPA’s efforts may not immediately translate into lower energy rates, the increased reliability and strategic planning are setting the stage for long-term improvements, he said. With Phase 2 of the Wartsila project nearing completion and a new fuel contract in place, there is cautious optimism that the future will be brighter for both WAPA and its customers, the board was told.
For now, the utility continues its work, balancing immediate operational needs with long-term strategic goals. The board’s approval of the FY 2025 budget, coupled with ongoing negotiations and infrastructure projects, marks a step forward in stabilizing WAPA’s services, said Knight. “We are rounding third base, and while there’s still a ways to go, we are on track to get there,” he said.
