A petition submitted to the Public Services Commission by two local civic groups for a reconsideration of the V.I. Water and Power Authority’s deal with Alpine Energy will put WAPA’s chief in the hot seat come Monday when he goes before the commission.
While WAPA Executive Director Hugo Hodge Jr. said he is not too worried about the substance of the petition, he understands the clock is ticking for WAPA to educate the public about the project in an effort to win over hearts and minds.
"This is a solid deal," Hodge said earlier this week, as he and his team planned their strategy. "It’s the best deal you’re going to see that allows the Virgin Islands to immediately get over its dependency on oil. The pricing is fair and not to mention, there’s a guaranteed output—not just something that’s available when the conditions are right. People have to understand there’s a difference."
Filed earlier this month by the V.I. Ratepayers Association and V.I. Conservation Society, the 30-plus-page petition for reconsideration asks the PSC to rethink its approval of two 20-year power purchase and interconnection agreements between Alpine and the Authority, citing a number of "hidden costs" that could increase the financial risk to WAPA and local ratepayers.
Among other things, the petition challenges the use of pet coke as a fuel source for Alpine’s generators, saying that it is pricey, just as volatile as oil and will leave consumers paying just as much for power as they do now.
WAPA will be paying Alpine between 14- and 31-cents per kilowatt hour over the course of the 20-year agreement. Hodge said Monday those rates had to be less than what it would cost the authority to produce the same amount of power, which adds up to about 33 megawatts on St. Thomas and 16 megawatts on St. Croix.
"These prices are excellent," he said this week. "Especially if you can imagine how much oil is going to cost us in the next 20 years."
As for the hidden costs, Hodge said all the authority is paying for is output, which includes the purchase of pet coke, while Alpine will shoulder all capital and production costs.
While Hodge has said it is true that the authority’s costs will be passed onto the consumer, he explained that would be the case in any deal.
Addressing the petitioners’ claim that using renewable energy, such as wind or solar would be cheaper, Hodge said recently that the consumer would ultimately still have pay for new technology to be installed. Wind and solar are less reliable energy sources, he added.
Under the Alpine deal, Hodge guarantees ratepayers a minimum 10 percent savings per bill.
But that does not mean renewable energy is out the window, Hodge said. Bringing in Alpine is just the start of the authority’s efforts to cut oil from its portfolio, which may soon include solar and wind.
"This is definitely not the end," he said.
The authority’s response to the individual points of the petition is due next week, when the PSC meets on St. Thomas Monday at 5:30 p.m.
