Sept. 28, 2008 — The V.I. Finance Department has issued an almost $17.5 million dollar check to the Virgin Islands Water and Power Authority as payment for all outstanding bills incurred by agencies and departments of the executive branch, Government House announced this weekend.
The total also includes outstanding balances for territorial hospitals, the Waste Management Authority and an outstanding balance for street lighting. WAPA's cash position has gone from bad to worse over the years.
Deferred fuel costs and overdue government bills are the main culprits. As of July, the authority's deferred fuel costs had hit $30.6 million — $16.6 million more than last year — while utility bills owed by the government topped $16.4 million.(See: "WAPA, Senators Ponder Ways to Cover Costs.")
The debts leave WAPA with a more than $40 million cash shortfall that prevents the utility from keeping up with repairs and maintenance on equipment housed at power plants in both districts.
We have taken the first step towards addressing the immediate cash flow crisis at the Water and Power Authority by providing these funds to address outstanding government obligations, deJongh said Saturday.
I am appreciative of the support of the 27th Legislature in taking favorable action on my Administrations proposal to address WAPAs cash crunch, deJongh said.
Dejongh signed legislation mandating the appropriation to WAPA earlier this month. He submitted the funding bill to the Legislature about three months ago, but senators amended it last month, adding in more money to pay off the government's outstanding debt to WAPA.
The original version of the bill earmarked about $13.7 million for WAPA: $8.7 million to cover a portion of the government's unpaid utility bills, and another $5 million to increase the budgets of various government departments and agencies to keep them up to date with their fiscal year 2008 electricity costs. The amended bill bumped WAPA's appropriation up to $17.4 million.
The check issued this weekend covers:
– $5.1 million for central government electric bills;
– $1.2 million for Schneider Regional Medical Center electric bills;
– $4 million for Gov. Juan F. Luis Hospital;
– $3.2 million for government water bills and;
– $4 million for the outstanding streetlights balance.
After the full appropriation was made to WAPA, there remained an outstanding streetlight balance in the amount of $2.5 million.
The payment, coupled with the work of the Administration in securing a line of credit for WAPA, is a significant step towards not only easing the cash flow crunch at the public utility but solidifying WAPAs operational stability which may result in a reduction of rates to V.I. consumers," deJongh said.
Legislation authorizing the government to back a line of credit for WAPA with a commercial bank has been approved by the Senate and is contained in the Senates version of the 2009 executive budget. DeJongh said he awaits the legislation so it can be reviewed at Government House and final action taken.
The line of credit will allow WAPA to pay its past due obligations to Hovensa, according to Government House. DeJongh also said the Public Services Commission has worked with WAPA to put in place an approval procedure for the borrowing.
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