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HomeNewsArchivesGovernor's 'Action Plan' Tackles Rising Utility Rates

Governor's 'Action Plan' Tackles Rising Utility Rates

Sept. 19, 2008 — Responding to the community's widespread dissatisfaction about high utility bills, Gov. John deJongh Jr. hit the radio airwaves Friday to confront the issue head on, laying out an "action plan" that he said would reduce the territory's dependence on oil and lower water and power rates.
"Not a day goes by that I do not grapple with the issue that affects each and every family in our territory: the cost of our water and power bill," deJongh said in a pre-recorded public service announcement aired on local radio stations and other media outlets. "Each WAPA bill has a real impact on our ability to pay for the basics, such as food, gasoline and medicine, and eliminates luxuries — such as buying a toy for our child or not working as many hours at a second job."
The blame for increasing costs is often shifted around from WAPA — focused in large part on the utility's maintenance problems and jumps in levelized energy-adjustment clause (LEAC) rates — to the Public Services Commission, finally landing on Hovensa and its oil prices, deJongh said.
"These emotions are real, and the impact is real, and they require that we develop a plan, execute it well and stay committed to the end result of lowering the overall cost to produce energy for our territory," he said.
The clear-cut goals for the territory are obvious: In the long term, there needs to be less dependence on oil, a move toward renewable-energy sources and a cut in energy costs by at least 25 percent over the next few years.
But there are also certain realities that must be faced — the first of which is that WAPA falls within the nearly two percent of utility companies in the United States that uses oil as its main fuel source, and the higher rates residents' pay are attributed to the continuous markup in petroleum prices, deJongh said.
The argument can also be made that the presence of Hovensa in the territory should result in lower oil prices.
"The immediate thought is that we should be paying less, or at least lower rates," the governor said. "The reality, however, is that the oil has to come from somewhere and it still has to be produced."
Solutions and Initiatives
Over the past few months, senators have passed a resolution mandating that the governor go back to the negotiation table with Hovensa officials and hammer out new sale prices for oil. On Friday, deJongh said he is "mindful" of the pricing concerns, and has begun to talk with refinery representatives.
"The process is underway and it will continue," he said in the public service announcement.
Senators have also called for the government to reduce its energy costs by 20 percent over the next few years — a goal that deJongh hopes to bump up to 40 percent in the long-term.
"To accomplish this, we have developed an action plan that will begin to address what has long been ignored, which is to reduce our dependence on oil for electricity and water and by extension help to lower our utility rates," deJongh said. "It is a plan that requires local-government action and involvement, federal government investment, community commitment and private-sector investment and partnering."
The first step of the plan has already taken place, the governor said: signing into law a comprehensive funding proposal that provides, among other things, $17.5 million to WAPA to pay off outstanding utility bills owed by the central government and the territory's two hospitals.
A new line of credit provided by a local bank would also give WAPA the money it needs to pay off what it currently owes Hovensa for fuel, deJongh said. The PSC will also set up an "approval procedure" to allow for the authority to borrow the money, he said.
The bank and the value of the credit line were not specified in the announcement.
The governor's action plan also requires that the authority's two waste-heat boilers — one for each district — be up and running by the end of December, which will allow about $36 million worth of savings to be passed on to the consumer. WAPA will also have until the end of the year to finalize power-purchase agreements with prospective alternate-energy providers, the governor said.
To expedite the closure of the Anguilla Landfill on St. Croix, WAPA and the Waste Management Authority are also in the midst of finalizing an agreement with an unspecified vendor for the construction of a waste-to-energy facility. The vendor has not yet been identified, and the completion date for the facility is still being ironed out, according to Government House spokesman Jean P. Greaux Jr.
"I am also sending a team to explore a U.S.-based petroleum coke facility and determine potential application to our location, especially since pet coke is the primary byproduct of the oil-refinery process," the governor said during Friday's announcement. "We are also exploring the downstream industries that can be started and jobs created to further expand our economic base."
The V.I. Energy Office is also working on rules and regulations that would allow residents and commercial businesses to install wind turbines, which would also allow them to tap into WAPA's net-metering program, the governor said.
"I remain very interested in attracting a major wind-power provider to further diversify our energy portfolio to reduce the average price per kilowatt (hour)," he said.
Other initiatives outlined by deJongh Friday include:
— exploring the possibility of connecting to the power grids of other Caribbean islands. The government has already received federal funds to research the feasibility of an interconnection between St. Thomas and St. Croix, the governor said; and
— drafting a request for proposals to contract with an energy-service company that could outline how the government can reduce energy costs for public schools throughout the territory.
"There is no one thing we can do to address the dilemma that we have ignored for far too long," deJongh said Friday. "While the 'blame game' gives us a release for our emotions, it is our pocketbook that I am most concerned about and want to repair. I am committed to finding solutions to our energy crisis. I see my task as setting the frame and then aligning the building blocks towards this goal, and I am dedicated to working together with you to change our energy dynamics."
Residents can also play a part in the process by not wasting energy, the governor added.
"Let us change our attitudes about energy as we change our practices and technologies," he said. "We need to do this where we work as well as where we live. We need to teach our children and ourselves to be aware when we are wasting energy, and we need to appreciate that this is really the same as wasting our money. There is much that we can do together — let us keep at it, and we will succeed in this effort."
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