Vitelco and Innovative Cable have officially moved on to new management, and its new owners told the Public Services Commission Wednesday that their plan is to make the utility more reliable.
They also promised, according to the terms of their new transfer of control agreement, no rate increases until 2014.
All the companies used to be the property of bankrupt mogul Jeffrey Prosser, who declared bankruptcy in 2006. He is in involuntary Chapter 7 bankruptcy; and ICC, the parent company of Vitelco, which he used to own, is in Chapter 11 bankruptcy.
Prosser’s biggest creditors, the National Rural Utilities Cooperative Finance Corporation (CFC) have since taken ownership of Vitelco and Innovative, with the transfer of control becoming effective Oct. 6.
Innovative Chief Executive Officer Seth Davis told the PSC Wednesday night that the CFC comes in with a "sound financial condition" and has: paid $45.7 million of the bankrupt company’s debts to the Rural Utilities Service and other creditors, contributed $10.7 million to their employees’ pension fund and paid $1.5 million owed to the PSC for assessments, among other things.
Davis said the company is investing $75 million over a period of four or so years to modernize its equipment and upgrade its services, which will in turn minimize customer disruptions and make the systems more reliable. Before the end of the year, Davis said customers will be able to see some "tangible" changes, including new products for cable and its wireless service.
Goals include finalizing its business plans and modernization strategy, putting more emphasis on disaster recovery and preparedness, training employees and being more transparent.
While the PSC had few concerns, member Donald "Ducks" Cole did make note that all the upper management in the room were from outside the territory and asked Davis if Virgin Islanders working for Innovative have a chance to move up in the company.
Davis said an existing management team is already in place in the territory and that the outside managers — who are living on-island — are simply "there for support," but provide a certain level of expertise that was needed to jump start the company quickly. VITELCO, St. Croix Cable and Caribbean Communications Corp. (doing business as Innovative Cable) all fall under a V.I. subsidiary of the CFC called DTR Holdings.
Next up on the agenda was testimony from the St. Thomas-St. John ferry companies, which tried to explain to the PSC why they took two months off from running the route from Cruz Bay, St. John to downtown Charlotte Amalie.
The ferries said two of the larger boats were down for repairs and due to the lack of customers catching the downtown ferry, they were actually losing money by continuing to make the trip. But Cole, along with PSC chairman Joseph Boschulte, reminded them that they are required by their franchise agreement with the government to provide the service and if they stopped running for two months, they were in violation of that agreement and "arbitrarily" doing what they wanted to do.
Boschulte gave them the option of letting some other company take over the route, but instead of agreeing to that — while they kept arguing during the meeting that it’s not profitable — the companies said no. The only alternative they gave was to not run the route during the slow summer months.
Boschulte called for an investigation of the ferries’ financials to see whether they had been over-collecting since the downtown run was stopped, and one St. John resident said later that this was exactly the action that the community had been looking for. The board voted to bring on Avery Williams as technical consultant on the investigation.
V.I. Water and Power Authority officials wrapped up the evening by talking about the utility’s generation problems and when they are going to be fixed. WAPA Executive Director Hugo Hodge Jr. said that St. Croix is in good shape, while the main generator on St. Thomas (Unit No. 23) is still down and might be out for another month while parts are being shipped in.
But the situation isn’t dire yet, since WAPA still has a few units that can balance the load, he said.
On the issue of bringing in more water-production facilities, WAPA urged the PSC to allow them to negotiate a contract without public pressure. Hodge said public pressure would only embolden the company he’s negotiating with to hike its prices, and the people of the territory would not get the best rate possible.
PSC members present during the meeting were Boschulte, Cole, Verne C. David and Elsie V. Thomas-Trotman.
