Aug. 28, 2008 — A 318-page report outlining ways to mitigate, and perhaps solve, the territory's reliance on oil was unveiled Thursday at a meeting of the Governing Board of the Virgin Islands Water and Power Authority (WAPA) at its Sub Base headquarters.
In addition, board members waxed hopeful that some habitual problems confronting the authority might be in remission, as evidenced by recent drops in the worldwide price of oil coupled with WAPA's victories last week in securing funds from the Public Services Commission and the Legislature.
The authority is scheduled to begin a strategic planning process in September for six to eight months, designed to produce a five-year blueprint of WAPA's goals and directions. Helping inform the process will be the "Power Supply Evaluation" report presented Thursday which updates a 2006 study, according WAPA spokeswoman Cassandra Dunn.
The report offers an analysis of what it calls "…the most economic and technologically sound alternatives…" to the territory's future electricity and water production options. Some of the alternatives outlined include wind power, reverse osmosis, waste-to-energy, pet-coke systems, use of liquefied natural gas and methanol, high-voltage submarine cables to connect St. Thomas and St. Croix, and other proposals.
Produced by the engineering consulting firm, R.W. Beck, Inc. of Orlando, Fla., the report cost $396,000, according to Dunn, and will serve as a springboard for discussion, planning and implementation over the next 20 years. Dunn said she'll have the report posted to WAPA's website within a week.
Immediate Relief Promised
As WAPA pursues alternative energy options, two decisions made on Friday will improve the authority's negotiating strength with oil supply company Hovensa, according to WAPA Executive Director Hugo Hodge Jr.
The Public Services Commission decided Friday to let WAPA increase its Levelized Energy Adjustment Clause (LEAC) fee by 19 percent Sept. 1 to meet current oil costs. In addition, the Legislature approved more than $17.5 million from the general fund to pay back years' worth of outstanding WAPA bills owed by the government.
"At this precise moment, all the stakeholders involved in the viability of WAPA seem to be acting as a team, and that's a wonderful moment," board member Gerald Groner said.
WAPA still has $38 million in unrecovered fuel costs from customers, and owes $32 to Hovensa, according to Dunn. WAPA's chief financial officer, Nellon Bowry, cautioned that the government is facing a $30 million deficit in fiscal 2008 and while the Legislature's appropriation is a much-needed step, the money has yet to arrive.
"So put this all in perspective," Bowry said. "We may or may not get the full amount (owed by the government) or it may or may not be stretched out. I don't know."
In addition, while worldwide oil prices have begun dropping lately, what WAPA is paying to Hovensa has increased from $97.66 per gallon in March to $139.39 in August, according to Maurice Sebastien, WAPA's assistant chief financial officer. He said there's a two-month lag in what WAPA pays, so prices may possibly begin to decrease in September.
"We're hopeful," said Dunn. "That's all we can say."
Reverse Osmosis for St. John and St. Croix
A $981,000 grant from the Department of the Interior is on its way to pay for installation of a reverse osmosis plant in St. John, according to Hodge. In addition, WAPA board members gave Hodge conditional permission to execute a contract with Seven Seas Water on St. Thomas, for a reverse osmosis plant on St. Croix. Currently WAPA charges between $14.90 to $16.90 per thousand gallons of water produced. The Seven Seas contract is contingent on WAPA negotiating a deal that reduces consumer costs.
Other Projects Funded
Other spending approved Thursday include:
— $2.8 million to insert a sleeve into a 31-year-old water main along the waterfront in St. Thomas from the sea terminal to the Coast Guard station, to repair leaks;
— up to $2.2 million to relocate overhead power feeders into an underground electrical duct bank on St. Croix from the Richmond substation to Christiansted;
— $350,258 to repair and recondition unit No. 16 gas turbine on St. Croix;
— $343,795 on a jeep and two bucket trucks — one used — for St. John, where currently no trucks operate;
— $325,000 to replace a rotor for the unit No. 12 generator on St. Thomas;
— $354,292 worth of security services on St. Croix for fiscal year 2009 awarded to Elite Security.
In attendance were Donald Francois, Kenneth Hermon, Jr., Gerald Groner, Noel Loftus, St. Clair Williams, Juanita Young. Absent were Brenda Benjamin, Cheryl Boynes-Jackson, Robert Mathes.
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