Sept. 26, 2002 – The chair of the Water and Power Authority's governing board said on Thursday that WAPA is in good shape both in its finances and in the way its electrical and water systems are being run. But to keep the authority at its best, Carol Burke said, new revenues must be raised through rate increases, and efficiency must be improved in the water distribution system.
Burke detailed the rationale for these views in her State of the Authority report delivered at WAPA's monthly board meeting held a few days before the Oct. 1 start of a new fiscal year. "The operation and financial performance of the utility has been good as we continue to advance our efforts toward the maintenance of our investment grade credit rating," she said.
Listed among the signs of progress seen in Fiscal Year 2002: implementation of a new strategic business plan, reduction of outstanding debt owed by the V.I. government, completion of critical projects at the water and power production plants; new training programs for plant operators; and a request made to the Public Services Commission to adjust the base rate WAPA can charge its customers.
Burke also provided details about projects totaling $32 million completed in FY 2002, including critical maintenance work and the installation of underground feeders as part of a long-term disaster mitigation plan.
Further, "The authority significantly reduced its government receivables with over $32.4 million in payments on past-due accounts," she said. "Total government receivables, including the independent agencies, for water and electricity fell from $26,596,115 in Fiscal Year 2001 to $14,611 in Fiscal Year 2002."
For the first half of FY 2002, WAPA's day-to-day administration was under the direction of Joseph Thomas, who had taken over as executive director in May of 2001. One of his top priorities — and one that he attained — was getting various government agencies to pay their overdue utility bills, some of which stretched back over years and totaled millions of dollars.
Following conflicts with the board over protests by utility workers and allegations concerning expenses submitted by top executives, Thomas and the board agreed this past April to an amicable separation halfway through his two-year contract. Since then, Glenn Rothgeb has been serving as acting executive director.
More positive news was in the growh of electricity sales. WAPA went into FY 2002 projecting 2 percent growth; sales actually have increased by 4.2 percent over FY 2001, Burke said. And, she added, an anticipated shortfall of 10 percent in the aftermath of the terrorist attacks on the mainland a year ago never materialized. "In fact, total sales were within 99.64 percent of our pre-9/11 budget forecast," she said.
However, WAPA increased its spending for security by $1 million in FY 2002, in large part because of concerns for the protection of the nation's power plants in the aftermath Sept. 11, 2001.
Revenues from water sales dropped in both districts, but Burke told the board that monitoring of customers' water use has improved over the old system of master metering which allowed some people to use water without paying for it.
WAPA's economic outlook for FY 2003 remains good, Burke said, but much of her optimism hangs on decisions pending before the PSC, especially the request for an increase in base service rates, which is projected to bring in $12.3 million in new revenues. "The authority believes that the request is just and reasonable," she said, noting that the utility had not filed for an increase in the electricity base rate since 1994.
Burke said WAPA needs the anticipated revenues to support a $50 million parity bond to fund capital improvement projects designed to increase the reliability of the electrical system, and to refinance the electrical system's line of credit.
The utility will ask the PSC's permission to raise water rates in FY 2003, Burke said, justifying the request as a needed step in reducing losses along the territory's water distribution system.
In Fiscal Year 2003, the report stated, "the authority will be focusing on reduction of the line losses on the electrical and water systems. WAPA recognizes that the line losses are excessive, and their reduction will be placed on the highest priority."
The presentation of the annual report took place as the board met at the St. John Westin Resort. At the gathering, board members congratulated Burke for completing two years as chair of the body. The board is continuing to meet at the resort on Saturday, with election of officers among the items on its agenda.
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