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WAPA Looks for New Ways to Cut Costs

Sept. 22, 2005 – The governing board of the Water and Power Authority brainstormed about saving money at its Thursday meeting, but its action items were all to spend money.
The board approved spending $3.4 million for the inspection and repair of the Unit 12 and 14 gas turbines.
Daryl Lynch, chairman of the board, told WAPA executive director Alberto Bruno-Vega: "I want to emphasize that people have to be held accountable for this work. We cannot continue to have units down."
The board also approved the $1.4 million purchase of a fully forged rotor for the Unit 10 turbine.
Those two actions came through the Planning and Economic Development Committee.
The purchase of four bucket trucks did not go through that standard process. Lynch said he had the purchase added to the agenda because "St. Croix is down to one bucket truck. These new trucks are urgently needed."
Alphonso Franklin, chairman of the Economic Development Committee, said he was reluctant because this purchase did not get committee consideration. But he said he understood the situation, so he moved that four trucks be purchased for almost $700,000.
Bruno-Vega said the trucks did not go through the usual purchase procedure because it was unclear just how they could be paid for. He said WAPA recently learned that an insurance settlement concerning Unit 10 was going to be about $500,000 more than anticipated, and that unexpected windfall would be used to purchase the trucks.
WAPA has often been criticized because its rates are much higher than those of stateside companies, but Bruno-Vega has said the criticism is unfair because stateside companies work on power grids that are connected to other grids, and therefore have many options when purchasing power.
At the governing board meeting on St. Croix, he presented charts showing "Comparative Bills for the Typical Consumer" on 10 different Caribbean islands. "We fare extremely well," he said.
The only island that showed a consistently lower rate than WAPA's was Barbados. Barbados was lower because it did not have to comply with the strict environmental protection laws with which WAPA had to comply, Bruno-Vega said. Power is produced on Barbados by burning a diesel fuel that could not be used legally in the Virgin Islands, he added.
The chart showed WAPA's cost for 100 KWh for a residential customer being $28.40 and for the Barbados customer as $20.36. St. Lucia was also slightly below the Virgin Islands for the low-end residential user at $27.60, but was more expensive than the Virgin Islands in higher categories of residential users and for commercial users. All the other islands were above the Virgin Islands in all categories and were as follows for the 100 KWh residential user:
– Anguilla, $29.16.
– Grenada, $30.82.
– Tortola, $31.18.
– St. Vincent, $32.30.
– Turks and Caicos, 36.37
– Dominica, $37.33.
– Antigua, $41.57.
Lynch said the report needed to get out to the public. He told the WAPA administrative staff to put it on WAPA's Web site by Monday.
Lynch told the board he had asked Hovensa officials to give WAPA a 5 percent discount on its oil, but the company refused. Officials of Hovensa and WAPA have scheduled another meeting next week to discuss possible cost-saving measures.
Bruno-Vega also suggested that discussions be initiated between the Virgin Islands and Venezuela. He said Venezuela was offering deals, that to Caribbean islands that generally allowed the islands to delay payment. Venezuela should have a special interest in giving the Virgin Islands a deal because the refinery it half owns – Hovensa — has a significant environmental impact on the territory, he said.

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