An official with Atlanta-based Southern Energy Inc. would neither confirm nor deny reports Tuesday that the company is offering to buy 80 percent of the Water And Power Authority for almost $77 million.
According to the V.I. Daily News, the newspaper obtained the purchase offer submitted by Southern Energy to the WAPA board of directors in a closed meeting on Sept. 24. The newspaper reported, among other things, that Southern Energy offered $76.8 million for 80 percent control of the utility’s electricity plants, water purification plants and water distribution system.
The government would apparently retain 20 percent of the utility, particularly the electrical system’s transmission and distribution equipment. Keeping those systems within government ownership would make them eligible for Federal Emergency Management Agency public assistance in the event of a natural disaster, according to the Daily News.
Chuck Griffin, a Southern Energy spokesman, said discussions between the parties continues. However, he wouldn’t elaborate other than to say the information reported by the Daily News has changed since it was delivered to the WAPA board late last month.
"What they reported would have been accurate two weeks ago," he said. "The numbers are moving around. We can’t give fixed numbers or details right now…"
Rather than being in negotiations, Griffin said, Southern Energy was in "discussions" with WAPA.
According to WAPA board member and Licensing and Consumer commissioner Andrew Rutnik, the seven-member board does not have the authority to negotiate or approve a sale of the utility. Gov. Charles Turnbull would have to negotiate a contract and then submit it to the Legislature for approval.
The WAPA board will meet in executive session, which is closed to the public, on Wednesday on St. Thomas to discuss Southern Energy’s proposal, Rutnik said.
"We’ll be looking at the proposal, maybe make modifications or leave it as it is," he said, adding that the government should determine its own valuation of the utility. "There are an awful lot of issues that need to be addressed," he said.
In discussing the proposed offer, Rutnik didn’t totally refute the information in Tuesday’s newspaper article. He said that it was his understanding that Southern Energy wouldn’t conduct a "mass firing" of employees. Rather, streamlining would be achieved through attrition and eliminating some upper management positions.
"As far as rank-and-file union members," he said, Southern Energy "plans to down downsize through attrition."
According to the Daily News, the sale could infuse the cash-starved government with more than $50 million. That makes the approval of the proposal critical. While Griffin said the company’s original estimate for approval was mid-December, that is now in question.
Turnbull has said that unless the government comes up with a funding source, it will face a $39 million shortfall for payroll in December. If payroll can’t be met, he said, as many as 2,500 government workers will be laid off.
Meanwhile, calls to WAPA executive director Raymond George were directed to the utility’s spokeswoman, Patricia Blake Simmonds. She said WAPA board chairman Arthur Downing is the contact person regarding the sale proposal. However, Downing couldn’t be reached for comment Tuesday.
Other WAPA board members include Ira Hobson, as Housing, Parks and Recreation commissioner; Dean Plaskett, as Planning and Natural Resources commissioner; Cecil George; George Parrott and Harold Brown.
The current three-year terms of Cecil George, Brown and Parrott expired in September of 1998. Downing’s expired in June of this year. The members remain on the board until they are replaced.
