Oct. 16, 2007 — V.I. Water and Power Authority representatives struck a positive chord with Public Services Commission members Tuesday, as consultants to the PSC said the utility is moving ahead with long-discussed plans to cut its line losses and conduct a study geared toward reducing its dependence on fossil fuel.
Georgetown Consultants Group principals Larry Gawlick and Jamshed Madan said they have met frequently with authority representatives, who have been ironing out a $333,330 contract with R.W. Beck Inc. to complete the condition-assessment study. It would pinpoint exactly how the authority could drive down energy costs and implement alternate-energy sources.
While WAPA is also making strides on plans to reduce line losses throughout the territory, utility officials said they would have to come up with a way of funding the plan that doesn't eat into the utility's already-dwindling revenues. At previous PSC meetings, WAPA executives have suggested that some of the line-loss project be funded through the levelized energy adjustment clause (LEAC) — a proposal that has not yet received the commission's approval.
However, on Tuesday board members did approve a proposal that would reduce line losses caused by large power consumers, such as hotels.
"We have lots of issues that have been created by these larger power consumers, and there's currently no penalty on the books to make them comply with certain industry standards, such as using power in an efficient manner," Gawlick explained.
To combat the problem, WAPA is proposing that a tariff be levied on these entities, which would ultimately be made to pay for the amount of power they actually use. Prior to the implementation of the tariff, large power producers would have about six months to acquire the equipment needed to handle their increased energy loads, such as the installation of additional capacitors. After that, the tariff will kick in, explained Gregory Rhymer, WAPA's director of systems and planning.
WAPA is also making progress on the installation of a new heat-recovery steam generator for St. Croix, Gawlick said later in the meeting. The authority is also looking at bringing on a project manager who would be responsible for creating a schedule and making sure all phases of the project are completed according to plan, Gawlick said.
WAPA has scheduled its completion date for September 2008.
Much of Tuesday's discussion also centered on WAPA's need to tap into the PSC's self insurance and hazard-mitigation fund, a pool of money earmarked for the utility's use during emergencies such as hurricanes or other natural disasters.
At a PSC meeting in August, commission members approved WAPA's request to use $1.5 million from the fund to replace a transformer that caused a district-wide power outage in July. Another $408,000 from the fund will be used by the authority as the matching contribution for a Federal Emergency Management Agency grant needed for putting electric lines underground in Charlotte Amalie.
On Tuesday, PSC members granted WAPA's request to use another $2.3 million from the fund to bury the electric-distribution system in Christiansted, St. Croix. While board members said the project was necessary, they also said policies outlining exactly when WAPA can tap into the fund need to be put in place.
Limiting WAPA's access to the money did not sit well with authority representatives, who said that any restrictions might exacerbate WAPA's existing cash-flow problems. Since the utility is currently paying out more for fuel that it is generating in revenues, the fund needs to be available in case of emergencies, explained Nellon Bowry, WAPA's acting executive director.
WAPA currently has $18 million in outstanding government receivables, which includes $4.6 million owed for the purchase and maintenance of streetlights throughout the territory.
Board members present during Tuesday's meeting were Joseph Boschulte, Donald "Ducks" Cole, Verne C. David, M. Thomas Jackson, Sirri Hamad and Alecia Wells. Ex-officio member Sen. Juan Figueroa-Serville was also present.
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