Southern Energy’s offer for 80 percent of the V.I. Water and Power Authority could be on the governor’s desk in five to 10 days, a company official said Wednesday.
George Gray told members of Harborside Rotary that the company will offer $100 million in cash up front for WAPA and refinance its $150 million bond debt. Gray also said customers wouldn’t see a rate increase for two years after the proposed purchase.
"We’re at a point that for the first two years the rates will remain the same as today," Gray said, adding that company projections indicate a decrease in rates after the two-year period.
Gray said discussions between the company and Gov. Charles Turnbull's negotiating team will end soon and the governor will have a proposal in the next five to 10 days. If Turnbull agrees with the offer, he will submit a bill to the Legislature.
Despite the company’s promise that it will not lay off any unionized workers, the union representing the majority of WAPA’s 570 employees is against the sale. Gray said that if the sale goes through, the company will bring in an independent firm to analyze wages within the first 90 days.
"No layoffs of union employees, period," Gray said. "Case closed."
Gray also said the company would keep current WAPA employees in the V.I. Government Retirement System while new workers will be covered under a company 401K retirement plan.
To sweeten the deal further, the company plans to establish a $1 million line of credit so new companies without the wherewithal can deal with the utility. Gray also said Southern Energy will start a $1 million economic development fund to help attract new businesses to the territory.
"By putting this money in, we’re investing in the future of this company," Gray said.
Although Turnbull is open to selling the utility, his second in command, Lt. Gov. Gerard Luz James II, is opposed to the idea. Additionally, St. Croix community activist Gail Watson Chiang is contending that the administration is violating the territory’s competitive bidding laws by dealing only with Southern Energy. Chiang’s lawyer, Lee Rohn,said she plans to file a lawsuit Friday if the administration doesn’t reply to the allegations.
Southern Energy acquired 63 percent of Freeport Power Co. on Grand Bahama in 1996. The company also owns the power company in Trinidad and Tobago.
At the end of 1998, Southern Energy’s assets were more than $11.6 billion, according to the company’s website. It also reported a net income for 1998 of $239 million.
