Aug. 22, 2008 — After much debate, a voluntary reduction in the amount and an amended motion, Public Services commissioners agreed Friday to allow the V.I. Water and Power Authority to collect the increased cost of oil from consumers, along with previously uncollected cost-of-oil increases.
"We are between a concrete wall and a blue-bit rock," said commissioner Donald "Ducks" Cole, who later introduced a motion to give WAPA 0.02 cents less than its reduced request and then amended it to give the authority an increase on the LEAC (Levelized Energy Adjustment Clause) to 0.41 cents per kilowatt hour. This is an increase of 0.08 cents over the current LEAC, and will mean an average increase of $40 based on the average monthly residential consumption of 500 kilowatt hours.
WAPA's original request was for 0.45 cent LEAC, but Nellon Bowry, chief financial officer, reduced the request during the hearing to 0.41 cents in light of the recent decrease in the per-barrel cost of oil. Commissioners also approved an increase on the water LEAC to $16.41 per 1,000 gallons, from $10.25.
To add to the authority's well-documented financial woes, two days after the last Public Services Commission hearing — where WAPA's request for another LEAC increase was postponed — Hovensa Refinery tightened its grip on the authority's money, demanding it pay for oil two days in advance of delivery. Hovensa also imposed an interest rate on overdue invoices, which was $28 million as of Friday, amounting to the prime lending rate. A spreadsheet from Hovensa showed interest of $41,604 accruing on WAPA's overdue bills since July 27.
Cole warned that, not unlike the hurricanes that have shut down power to the islands for months at a time, "Hurricane Hovensa" could have the same impact.
"If WAPA doesn't have fuel to produce electricity," Cole said, "then we won't have electricity."
He added, "We're targeting WAPA when we should be targeting Hovensa."
Said Commissioner Verne C. David, "I am no fan of WAPA's, but WAPA has no control over the cost of oil."
David lamented the lack of public understanding of the LEAC: "Ninety percent of the people don't understand they are responsible for payment for the cost of fuel." The LEAC charge, he said, "has no affect on the bottom line of the authority."
During Friday's night's four-and-a-half hour PSC meeting, word came that a bill had been passed by the full Senate to appropriate $17.4 million to pay down the government's outstanding utility bill.
Hugo Hodge, WAPA executive director, said he wasn't exactly sure what it would be used for once it's actually allotted.
"But it will be used in the best possible manner for the authority, whether it's paying down the authority's debt or for future oil deliveries," he said after the meeting."It all depends when we get it."
The bill has to be approved by the governor, and then it's up to the Office of Management and Budget to issue the payment.
On other matters left over from Thursday, Commissioner Alecia Wells read into the record a motion seeking to hold the trustees currently running the Virgin Islands Telephone Co. (Vitelco) in contempt for not making payments into the company's employee pension fund.
Wells was on the PSC and at the helm for much of the time former Vitelco owner Jeffrey Prosser was using Vitelco's substantial revenues to buy expensive artwork and jewelry, throw multi-million dollar parties in his various mansions and fly his jet from place to place. Bankruptcy proceedings have revealed that Prosser "upstreamed" about $190 million from Innovative Communications Co. holdings over the five years preceding the bankruptcy — also on Wells' watch.
She also was the signatory on a letter to the bankruptcy court pleading on behalf of Prosser maintaining ownership of the company that failed to make $15 million in payments into the employees' pension plan under Prosser's leadership.
"We're all supposed to be in Jeffrey Prosser's pocket," Wells said Friday night. "There's another Jeffrey Prosser here now," she continued, apparently referring to the trustees who were appointed to run the ICC companies until they are sold to satisfy the nearly $1 billion debt accrued during Prosser's ownership.
The motion failed.
In attendance Friday were Chairman Joseph B. Boschulte and commissioners Cole, David, M. Thomas Jackson and Wells.
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