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The WAPA Board Has a Message for Ratepayers

Aug. 22, 2008 — The Governing Board of the Virgin Islands Water and Power Authority (“WAPA”) is committed to providing reliable, efficient, and affordable water and power services to the residents of the U.S. Virgin Islands. As representatives of the ratepayers, and ratepayers ourselves, the Board is very mindful of the challenges that face the Authority’s customers and its employees. During this difficult time for the territory’s economy, all residents feel the effect of the increase in oil prices in every aspect of our lives. The sharp rise in the price of fuel oil is not a matter that affects the Virgin Islands alone. It is a global issue that is crippling countries large and small throughout the world. As the cost of fuel has risen, gas stations, shipping companies, supermarkets and other fuel dependent industries have been forced to increase prices dramatically. We know that increased living expenses in the territory are having an unimaginable impact on our customers and that increases in the fuel surcharge (LEAC– Levelized Energy Adjustment Clause factor) have forced our customers to tighten their belts just a bit more.
The Board feels fortunate to have as Executive Director Hugo Hodge Jr. He and the rest of the management team are tirelessly struggling to make ends meet each and every day. WAPA is a 24 hour/365 days a year operation whose dedicated employees take pride in serving the people. The Board, management, and staff are working daily, despite the limited resources, to enhance and improve operations with the overarching goal of decreasing our reliance on fuel oil, decreasing operating costs, and increasing efficiency and reliability. We know that achieving these goals will be a marathon, not a sprint. Therefore we must have plans that not only provide short term solutions but address the medium and long term as well. Towards that end, we are moving forward with the following:
• Fast tracking the development of a new strategic plan. The strategic plan will be a cooperative effort of both the Board and management. It will include input from experts and officials outside the WAPA family. The finished product will be our guidebook for energy and water generation as well as capital and organizational improvements over the next three to five years.
• Completing repairs to the Waste Heat Recovery Boiler Unit #21 in St. Thomas’ Randolph E. Harley Power Plant this month. This is projected to generate savings of more than $18 million in fuel costs annually.
• Completing the construction of the Waste Heat Recovery Boiler Unit #24 in the St. Croix Richmond Power Plant by the end of the year which will produce another $18 million in fuel costs savings annually.
• Continuing aggressive pursuit of water and electric line loss including theft. A new formalized plan was recently presented by management. It will be available for review by the public on WAPA’s website shortly.
• Slashing the FY2009 budget by more than $6 million and implementing extremely stringent procedures for only critical expenditures.
• Moving forward with six of fourteen proposals submitted in response to WAPA’s Request for Proposal (RFP) to Provide Electric Energy to the Virgin Islands Water and Power Authority. WAPA is now engaged in final review and discussions with these companies with a goal of entering into a 20-year Power Purchase Agreement (PPA) within the next three to five months for the purchase of a guaranteed monthly supply of energy at a cost that is lower than WAPA’s projected energy costs. The selected proposals include waste-to-energy, coal, ocean thermal energy conversion (OTEC), geothermal, and a combined wind and solar solution.
• Actively pursuing an under ocean cable and retrofitting existing units to operate on natural gas. WAPA has already approached the Puerto Rico Electric Power Authority (PREPA) regarding a submarine cable tie-in between Culebra and St. Thomas. Additionally, plans are being formulated to access the new natural gas depot being developed on Puerto Rico’s eastern shore.
• Expanding the search for energy and water production alternatives that will increase efficiency and reduce costs. New technologies as well as alternatives that utilize WAPA’s existing equipment and resources will be considered.
• Developing customer focused programs such as working with banks, federal, and other funding sources. These could assist consumers in purchasing solar hot water heaters and renewable energy systems.
• Continuing our petitioning efforts to the PSC for approval of automatic LEAC adjustments. These adjustments would mean smaller increases that would be done incrementally as the cost of fuel increased beyond a certain predetermined price range as versus dramatic increases every six months. Price decreases would also be reflected in the consumer’s bill on a real time basis instead of having to wait as much as 6 months or more for the next PSC hearing regarding a LEAC adjustment.
Every day in every way, WAPA is working for the best interest of the people of the Virgin Islands. WAPA is committed to meeting its challenges, whatever they may be, and improving the quality of life for all of its ratepayers in the Virgin Islands. We ask the territory’s residents for their patience and support as we work through these issues.

Editor’s 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.

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Aug. 22, 2008 -- The Governing Board of the Virgin Islands Water and Power Authority (“WAPA”) is committed to providing reliable, efficient, and affordable water and power services to the residents of the U.S. Virgin Islands. As representatives of the ratepayers, and ratepayers ourselves, the Board is very mindful of the challenges that face the Authority’s customers and its employees. During this difficult time for the territory’s economy, all residents feel the effect of the increase in oil prices in every aspect of our lives. The sharp rise in the price of fuel oil is not a matter that affects the Virgin Islands alone. It is a global issue that is crippling countries large and small throughout the world. As the cost of fuel has risen, gas stations, shipping companies, supermarkets and other fuel dependent industries have been forced to increase prices dramatically. We know that increased living expenses in the territory are having an unimaginable impact on our customers and that increases in the fuel surcharge (LEAC-- Levelized Energy Adjustment Clause factor) have forced our customers to tighten their belts just a bit more.
The Board feels fortunate to have as Executive Director Hugo Hodge Jr. He and the rest of the management team are tirelessly struggling to make ends meet each and every day. WAPA is a 24 hour/365 days a year operation whose dedicated employees take pride in serving the people. The Board, management, and staff are working daily, despite the limited resources, to enhance and improve operations with the overarching goal of decreasing our reliance on fuel oil, decreasing operating costs, and increasing efficiency and reliability. We know that achieving these goals will be a marathon, not a sprint. Therefore we must have plans that not only provide short term solutions but address the medium and long term as well. Towards that end, we are moving forward with the following:
• Fast tracking the development of a new strategic plan. The strategic plan will be a cooperative effort of both the Board and management. It will include input from experts and officials outside the WAPA family. The finished product will be our guidebook for energy and water generation as well as capital and organizational improvements over the next three to five years.
• Completing repairs to the Waste Heat Recovery Boiler Unit #21 in St. Thomas’ Randolph E. Harley Power Plant this month. This is projected to generate savings of more than $18 million in fuel costs annually.
• Completing the construction of the Waste Heat Recovery Boiler Unit #24 in the St. Croix Richmond Power Plant by the end of the year which will produce another $18 million in fuel costs savings annually.
• Continuing aggressive pursuit of water and electric line loss including theft. A new formalized plan was recently presented by management. It will be available for review by the public on WAPA’s website shortly.
• Slashing the FY2009 budget by more than $6 million and implementing extremely stringent procedures for only critical expenditures.
• Moving forward with six of fourteen proposals submitted in response to WAPA’s Request for Proposal (RFP) to Provide Electric Energy to the Virgin Islands Water and Power Authority. WAPA is now engaged in final review and discussions with these companies with a goal of entering into a 20-year Power Purchase Agreement (PPA) within the next three to five months for the purchase of a guaranteed monthly supply of energy at a cost that is lower than WAPA’s projected energy costs. The selected proposals include waste-to-energy, coal, ocean thermal energy conversion (OTEC), geothermal, and a combined wind and solar solution.
• Actively pursuing an under ocean cable and retrofitting existing units to operate on natural gas. WAPA has already approached the Puerto Rico Electric Power Authority (PREPA) regarding a submarine cable tie-in between Culebra and St. Thomas. Additionally, plans are being formulated to access the new natural gas depot being developed on Puerto Rico’s eastern shore.
• Expanding the search for energy and water production alternatives that will increase efficiency and reduce costs. New technologies as well as alternatives that utilize WAPA’s existing equipment and resources will be considered.
• Developing customer focused programs such as working with banks, federal, and other funding sources. These could assist consumers in purchasing solar hot water heaters and renewable energy systems.
• Continuing our petitioning efforts to the PSC for approval of automatic LEAC adjustments. These adjustments would mean smaller increases that would be done incrementally as the cost of fuel increased beyond a certain predetermined price range as versus dramatic increases every six months. Price decreases would also be reflected in the consumer’s bill on a real time basis instead of having to wait as much as 6 months or more for the next PSC hearing regarding a LEAC adjustment.
Every day in every way, WAPA is working for the best interest of the people of the Virgin Islands. WAPA is committed to meeting its challenges, whatever they may be, and improving the quality of life for all of its ratepayers in the Virgin Islands. We ask the territory’s residents for their patience and support as we work through these issues.

Editor’s 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.