A "positive dialogue" has taken place between the Virgin Islands Water and Power Authority and Puerto Rico’s Electric Power Authority that could facilitate installation of underwater cable between Culebra and St. Thomas, WAPA’s chief officer said Thursday.
Speaking at WAPA’s monthly board meeting Thursday, Executive Director Hugo Hodge Jr. said the cost of the cable is estimated at $40-$60 million, but said the project might be eligible for renewable energy grants by connecting with Puerto Rico’s wind farm.
WAPA is waiting to receive the wind farm’s coordinates in order to get estimates on the cable cost and will then apply for the renewable energy grants.
WAPA and PREPA are also discussing a “mutual aid” agreement that would enable WAPA to get assistance from PREPA in the event of an emergency and training of WAPA personnel by PREPA.
The board voted unanimously in favor of the following action items on the agenda:
• An addendum to a contract previously approved by the board for the repair and overhaul of Unit 13, the largest unit and the workhorse of the St. Thomas system. Some of the rotor buckets, originally scheduled to be repaired, need to be replaced, requiring an additional $1.8 million. The original contract with General Electric International, Inc. for repairs to Unit 13 was for $3.5 mil. WAPA expects Unit 13 to be back on line by March 13, 2010.
• Authorization for WAPA to enter into a contractual agreement with Electric Supply of Tampa, a transformer supplier, to purchase pole-mounted transformers exclusively from them at a fixed price for one year. The benefit of this contract is that vendor will keep a minimum supply of inventory of transformers needed, drastically reducing the former waiting period of 16 weeks. Electric Supply of Tampa has agreed to have the transformers at a shipping port in Florida within seven days of an order. In addition, WAPA will purchase transformers from the vendor on a quarterly basis. The cost of the contract is $265,000 but WAPA will pay quarterly based on the number of transformers ordered.
• Authorize WAPA to negotiate with First Bank VI to increase their bank overdraft facility from $5 mil to $10 million. An insufficiency in LEAC has caused a cash shortage and an increase in the overdraft will bridge the gap between fuel and debt service payments due and incoming LEAC payments. An increase in the LEAC, previously approved by the PSC, goes into effect this month.
• Negotiate terms to acquire through purchase, lease, or grant approximately three to five acres of land from the Government of the Virgin Islands to construct a mid-island substation on St. Croix. The new substation will minimize line loss and act as the interconnection with the Alpine Energy Group waste to energy plant. WAPA is looking at land in Estate Spanish Town or Estate Bethlehem but according to Hodge, the Estate Spanish Town property is preferable due to its proximity to both the AEG plant and the Diageo plant. The substation would provide a direct feed to the Diageo plant. The new substation will have a 69 KV circuit, the first circuit of that voltage magnitude on St. Croix, placed underground. It will also be the first actual transmission circuit. All other circuits on St. Croix are distribution circuits. Hodge told the board that the cost of the cable will be funded by interconnection fees paid by AEG.
• Authorize the executive director to pursue the refunding of electric system series 1998 bonds. Nellon Bowry, WAPA’s chief financial officer, told board members that a window of opportunity exists through December to refund bonds. He provided copies of an article posted on Bloomberg.com Wednesday that touted refunding bonds due to the “lowest interest rates since Lyndon B. Johnson was president”. Hodge told the board that the money will be used to finance WAPA’s obligations to upgrade and expand its infrastructure.
“Not to be confused with GERS,” said Hodge, “I’ll categorize the needed projects as Tier I and Tier II.” The Tier I projects are the St. John underwater cable and the Richmond substation and the Tier II projects are the replacement of switch gears on St. Thomas and the refurbishment of units.”
Hodge also told board members that as they look long-term at the possibility of partnering with Puerto Rico, WAPA hopes to be able to sell electricity to the British Virgin Islands, which is the main reason the underwater cable to St. John is necessary.
Board members present during Thursday’s meeting were Wayne Biggs, Donald Francois, Gerald Groner, Cheryl Boynes-Jackson, Noel Loftus, and Chairperson Juanita R. Young.
