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Sept. 16, 2005 – The enactment of the Emergency Job Creation and Economic Stimulus Act of 2005 and the subsequent amendment to the law has generated much controversy. It is my contention that the amendment opens the process for WAPA to secure a power purchase agreement through the competitive bidding. One which not only considers jobs and economic stimulus, but also considers rate reductions for all Virgin Islanders. This amendment allows the Water & Power Authority and the Public Services Commission, to negotiate an agreement that considers job creation and economic stimulus, as well as rate reduction and the health of our environment.
I want to make it clear, there is nothing in the amendments that precludes any company from coming to the territory and investing $150,000,000 nor is there anything that stops any company from creating 400 jobs. What the amendment does is entice more company's to bid on providing WAPA and there-by the rate payers with a cost efficient means of power production.
The law, as currently written, mandates that the small power provider must be able to provide 400 permanent jobs and must provide an investment of $150,000,000 on St. Croix. It also specifies that the preferred fuel source would be a waste derivative fuel. Furthermore, there is no mention of rate reduction or stipulations on the price of electricity sold to WAPA other than a clause stating that the cost cannot be higher than the cost of WAPA to produce the electricity.
This ties the hands of WAPA and the PSC in negotiating the best deal possible. For instance, St. Croix Renaissance Group has the ability to provide 400 jobs but they have already made a substantial investment in their industrial complex. They will not be investing an additional $150,000,000 in their facility and therefore cannot compete for the power purchase agreement. Newly certified Antilles Energy has the potential to provide 30 megawatts of power on both St. Croix and St. Thomas utilizing biomass, a relatively inexpensive and environmentally friendly fuel source. Antilles Energy proposes to invest in excess of $150,000,000 on each island along with 200 jobs at each facility. This proposal can significantly reduce the cost of electricity for all Virgin Islanders. Unfortunately, 200 jobs on St. Croix would fail to meet the required threshold and prevent WAPA from engaging in negotiations with Antilles Energy. The law also prevents more than a dozen other proposals from being heard and considered by WAPA. Conversely, nothing in the new amendment prevents Caribbean Energy Resources, or any other company from entering proposals to WAPA to serve as a small power provider.
I am fully supportive of the intent behind the Emergency Job Creation and Economic Stimulus Act. The Water and Power Authority needs to diversify its fuel source in order to provide electricity and water at reasonably affordable rates. The decision to utilize the necessity of a power purchase agreement as an incentive for economic development on the island of St. Croix was brilliant. That is why I supported the bill and its subsequent override. However, there is also a great opportunity to utilize this power purchase agreement to secure much needed utility rate reduction throughout the territory. We should not trade relief from high electric and water rates for economic development when we can accomplish both. An open bidding process allows for consideration of the impact of the proposed investment on the rates WAPA charges its customers.
I am very much concerned with the high utility rates that the territory is faced with. I also believe the best power purchase agreement can be solicited if the playing field is open to all interested parties and utility rate reduction is part of the discussion. I have no intention of putting the interests of any one individual, corporation, or investor above the interests of the people of the Virgin Islands.
