December 4, 2007
TO OUR VALUED CUSTOMERS:
The current spike in oil prices has now placed an even heavier financial burden on the Virgin Islands Water and Power Authority to produce electric power, and consequently, a similar burden on our customers to pay their bills. While we anticipated increases while planning for measures of lowering the cost of electric power to our customers, the global impact of these sharp increases is being felt by us in every phase of our way of life in the Virgin Islands.
However, despite lingering high government receivables, and our inability to recoup deferred fuel costs through the LEAC (customer fuel surcharge) since the year 2000, our plans for securing alternative and renewable sources of generation are moving as quickly as we can through another RFP process. Our initial attempt to secure an alternative energy co-generator (wind) in 2006 was not successful because of weather concerns, and the impact major weather problems would have on a newly installed system of wind turbines. In addition, WAPA’s attempt at a petroleum coke generation facility with HOVENSA presented a major financial investment, which WAPA by itself could not accomplish. Our research tells us that to construct such a facility is presently estimated at $324 million.
Our immediate and short-term solutions are being implemented, which include making our system more efficient by the operation of two waste heat recovery boilers, and the line loss reduction program. WAPA’s fuel hedging program will also help us to save money by stabilizing some of our costs for fuel. We are also working in-house to lower costs by turning off lights when not needed (day or night), adjusting air conditioning units and replacing them with more energy efficient models when necessary, and quickly repairing leaks which may occur in the plumbing in our buildings. We are convinced that even the smallest energy saving changes can make a big difference and we urge our fellow governmental agencies to institute their own energy saving measures.
Further out, our Generation Portfolio Mix, which is a dynamic plan adjusted to available technology, is a System Modification and Improvement Plan, which will greatly help us to reduce our dependence on expensive fuel. WAPA has explored the many options for more efficient and less costly generation, however, WAPA as a public utility,
is obligated to follow the procurement laws of the Virgin Islands in order to seek out the least expensive means of producing electric power and water. There are presently several interested entities that are willing to enter into some form of business model with WAPA,
and these entities will be submitting proposals to our present RFP. With the proper financing, WAPA is also not averse to constructing our own alternative generating plants.
We can understand the frustration of our customers who are well aware that there are presently lower options for the production of electric power and water. However, the problem we face today with the price of oil at $90 a barrel is a shared responsibility that now changes our lives and the way we use energy, at least in the short-term. There are many opportunities on the demand side, which can help consumers lower their electric and water bills. WAPA has instituted some cost saving measures, which have been passed on and made available to the community. Energy saving appliances and compact fluorescent bulbs (CFL’s) are one way that our homes can significantly reduce their electric bills.
WAPA with the V.I. Energy Office is consistently providing information to the public as to what is available in order for the consumer to lower electric consumption. We urge our customers to follow this advice. It is possible to change your energy habits without changing your comfort level.
In order to maintain the financial integrity of the WAPA organization at this time, WAPA must recoup the monies it has been paying to HOVENSA for fuel while the cost of fuel has been steadily increasing over the past year. We are anxious to see the government receivables decrease and become current so that funding will become available to provide necessary maintenance and improved service. We hope this recent spike is temporary and the price of fuel will return to more affordable levels, while we continue to pursue those available options to lower the cost to our consumers.
You have our commitment.
Governing Board
Virgin Islands Water and Power Authority
Editors note:We welcome and encourage readers to keep the dialogue going by responding to Source commentary. Letters should be e-mailed with name and place of residence to source@viaccess.net.
