83.9 F
Charlotte Amalie
Friday, October 23, 2020
Home News Archives V.I. Debt Blamed for WAPA's Inability to Pay Hovensa

V.I. Debt Blamed for WAPA's Inability to Pay Hovensa

June 11, 2004 – The Water and Power Authority has been told that if it fails to bring its account with Hovensa current, fuel shipments will no longer be delivered as of Tuesday.
WAPA currently owes Hovensa $4 million in delinquent fuel costs.
In an emergency meeting on Thursday, the WAPA board authorized the authority's executive director, Alberto Bruno-Vega, to borrow up to $5.6 million on a line of credit from two local banks — Banco Popular and FirstBank — to pay off its debt by Hovensa's Monday deadline.
Hovensa had asked WAPA to pay what it owed by the end of May, Bruno-Vega said on Friday, but the utility was unable to meet that deadline and instead submitted a payment plan to the oil refinery. Hovensa then gave the authority until June 14 to pay up.
"If by June 14 we did not become current in our account, they would not make any more deliveries to us, we were told," Bruno-Vega said.
Alexander A. Moorhead, Hovensa vice president for government affairs and community relations, said on Friday that WAPA and the refinery are handling the situation "privately" and he did not wish to comment at this time.
According to Bruno-Vega, WAPA has been having difficulties in meeting its financial obligations partly because of money owed the authority by the central government and its instrumentalities and partly because of $15 million in "underrecovery" from its ratepayers.
The government currently owes WAPA $15 million in water and electric bills, with the V.I. Housing Authority owing $5.2 million of that.
The "underrecovery" refers to the surcharge WAPA places on electric bills that is calculated every six months to reflect changes in the cost of fuel oil. Costs have been rising sharply in the last year, especially in the last few months, and the "levelized energy adjustment clause" surcharge has not covered those costs, as WAPA has been telling the Public Services Commission for some time.
"We are $30 million in the hole," Bruno-Vega said. "This has created an enormous strain on WAPA's finances to the extent that to gather the funds needed for Hovensa, we have become delinquent on our vendors."
Bruno-Vega said the utility also is concerned that it may not be able to "beef up" its fuel reserves for the hurricane season.
He said he has asked the Legislature through Sen. Adlah "Foncie" Donastorg to make an appropriation for the $15 million that is owed the authority by the government. He also has asked that payment of WAPA bills be a line item in each department and agency's budget.
"If the monies for electricity and water were line-itemed, those payments would not be tapped into," Bruno-Vega said. "This will help us in the future. I hope the legislators will take us seriously."
Bruno-Vega said he also has asked the Public Services Commission to implement a monthly adjustment clause that would allow the utility to keep up with fluctuations in the oil market.
If these areas are addressed, Bruno-Vega said, WAPA will be in better condition financially.

Back Talk

Share your reaction to this news with other Source readers. Please include headline, your name, and the city and state/country or island where you reside.

Publisher's note : Like the St. Thomas Source now? Find out how you can love us twice as much — and show your support for the islands' free and independent news voice … click here.

Print Friendly, PDF & Email
Advertising (skip)
Advertising (skip)
Advertising (skip)

Support the VI Source

Unlike many news organizations, we haven't put up a paywall - we want to keep our journalism as open as we can. Our sites are more popular than ever, but advertising revenues are falling - so you can see why we could use your help. Our independent journalism costs time, money and hard work to keep you informed, but we do it because we believe that it matters. If everybody who appreciates our reporting efforts were to help fund it for as little as $1, our future would be much more secure. Thanks in advance for your support!





Comments Box SVG iconsUsed for the like, share, comment, and reaction icons
Load more
Print Friendly, PDF & Email