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PSC Looks to Federal Courts in WAPA Dispute

June 19, 2008 — Editor’s Note: As of 2019, there is no record of an appeal in the U.S. Third Circuit or in U.S. District Court for the Virgin Islands – Bill Kossler

In an effort to assert day-to-day control over V.I. Water and Power Authority capital projects, the V.I. Public Services Commission is appealing to federal courts after several judicial setbacks in the Virgin Islands.
Under V.I. law, the PSC is authorized to set WAPA’s rates. It also has general power to regulate privately owned utilities but not necessarily publicly-owned WAPA, which has its own government-appointed governing board. Whether the PSC has this authority is the question before the courts, but so far the courts have ruled against the PSC.
In April 2003, after a hearing on a WAPA rate increase request, the PSC issued an order requiring WAPA to let the PSC review and approve WAPA’s selection of generators, approve its methods for implementing capital projects like replacing generators, oversee and approve the progress being made on capital projects and then gauge the impact of the projects on WAPA services to its customers.
According to WAPA legal counsel Denise Rhymer, the PSC made a similar bid to exercise direct control over WAPA in 1977, which was unsuccessful. That case was about WAPA’s sale of a power plant.
In PSC v. WAPA, the V.I. District Court held the “laws of the Virgin Islands do not empower PSC to regulate, approve or disapprove” the sale of a power-generating plant because the PSC is “limited to its power to fix rates.”
While the current question of how much authority the PSC has to make decisions for WAPA appears identical to that resolved by the 1977 court case, several changes have been made to the laws concerning both the PSC and WAPA over the intervening years, muddying the legal situation.
WAPA appealed the PSC’s April 2003 order but the PSC did not act on the appeal. Later that year, WAPA filed suit in V.I. Superior Court.
Over the next year, the PSC issued several more very similar orders, in one case forbidding WAPA from issuing a request for proposals for a new generator without PSC approval. In another, the PSC directed WAPA to pay $15,000 to the PSC for work by its consultants related to orders WAPA was disputing.
WAPA effectively ignored these disputed PSC orders.
On Dec. 1, 2006, in V.I. Territorial Court, Judge Maria Cabret ruled in favor of WAPA. On Jan. 8, 2007, in V.I. Superior Court, Judge Edgar Ross ruled similarly in a separate case. On June 9 of this year, the V.I. Supreme Court upheld the Cabret and Ross decisions.
“We will affirm the trial court’s decision that PSC’s power over WAPA is limited solely to the power to fix rates. … PSC does not have the power of general oversight over WAPA’s actions,” reads the V.I. Supreme Court decision, in part.
Cabret, now a member of the Supreme Court, recused herself and did not deliberate on the appeal.
At its regular meeting the following day, the PSC voted to appeal the decision to federal courts.
Editor’s note: The Cabret and Ross decisions are separate cases.
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