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HomeNewsArchivesKRIGGER DEFENDS WAPA SALE, OPENS DISCUSSION

KRIGGER DEFENDS WAPA SALE, OPENS DISCUSSION

The Virgin Islands government is expected to post the proposed agreement with Southern Electric on its Web site by the end of this week. The lengthy document includes all details of the proposal, which the Turnbull administration has promised will not be kept back from the public.
Gov. Charles W. Turnbull's chief financial advisor, Rudolph E. Krigger, one of the key negotiators of the deal, said Wednesday the public will have ample opportunity to review the plan, adding that the public meetings already held would not be the only opportunities for discussion.
"The governor is very aware of the separation of powers doctrine and has said that the responsibility for the public hearings will lie with the Legislature."
Krigger and a representative from Southern Energy discussed the WAPA joint venture on WVWI Radio One's talk show "Opening Doors" Wednesday morning.
Responding to the lawsuit filed by St. Croix businesswoman Gail Watson Chiang,
Krigger maintained that WAPA was never offered to anyone. Chiang filed suit a few months ago charging that the deal with SEI was invalid because no other companies were invited to bid for WAPA.
"The government did not put WAPA on the block," Krigger said. "SEI made a proposal, and initially they were steered in the direction of the WAPA board."
After talks with and presentations from SEI, Krigger said, the WAPA directors formally wrote to the governor, "advising him that the initial talks seemed sincere and that he should be open to the financial and legal aspects of the proposal." Krigger also defended the negotiated partnership arrangement that would allow SEI to control 80 percent of the company for the 25-year life of the arrangement, while the government would control 20 percent. He said there would be unprecedented minority veto authority, which was not easily won.
"This was a hard fought issue," he said. "In the end, we get assurances of veto power even with 20 percent interest, an offer that the government is satisfied with."
As it urges acceptance of the arrangement with Southern, the administration is promoting the economic benefits to the territory of converting
the electric utility into a taxpaying corporation. Dave Dunbar, the project director for Southern, explained, "Currently WAPA makes payment in lieu of taxes, to the tune of $150,000. Southern is prepared to start by paying $350,000 in the first year and a 2 percent increase each year in property and fuel taxes."
In the sixth year of the agreement, Dunbar said, Virgin Islands Electric and Water, as it would be renamed, would begin to pay gross receipts taxes.
According to Krigger, the government has anticipated that, as a private company, WAPA, or VIEW, would be eligible to apply for benefits under the Industrial Development
Program. "Should any benefits be granted," he said, "they would have to be reflected in the rates charged to customers."
If IDC benefits are approved, VIEW's rates to customers would be taken into consideration and in essence a reduction in rates would occur, Krigger said Wednesday.
Government and Southern Energy representatives plan more media appearances in the weeks ahead. The Virgin Islands Legislature must ultimately decide whether the electric utility ownership-sharing proposal will become reality.

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