Because generator problems plaguing St. Thomas have made both water and power production less efficient, using more fuel, the V.I. Public Service Commission approved Tuesday a sharp increase in the V.I. Water and Power Authority’s fuel charge Tuesday, from $14.33 to $19.07 per thousand gallons.
An average customer will see their bill increase by about $11.37 due to the increased Levelized Energy Adjustment Clause, (LEAC) fuel charge, WAPA officials said at the last PSC meeting in September.
Jim Madden of Georgetown Consultants, a consulting firm regularly used by the PSC for technical evaluations of its regulated utilities, said the increase was ultimately due as much to unpaid government and hospital WAPA bills as it is to actual fuel prices.
When the government or other large customers who cannot easily be disconnected accumulate multiple millions of dollars in past-due bills, WAPA is strapped for cash and is forced to defer maintenance in order to keep buying fuel and operating the plant from day to day, he said. "This deferral of maintenance leads to breakdowns, causing WAPA to use less efficient units, causing an increase in the use of fuel," said Madden.
Right now, the main problems are $9.5 million due for the territory’s streetlights and $5.5 million for utilities at Gov. Juan F. Luis Hospital, said WAPA Chief Financial Officer Joseph Boschulte.
Once the St. Thomas plant is running at full efficiency, and once new energy-saving reverse osmosis water production facilities come online in both districts, costs should drop dramatically, according to WAPA officials.
Fuel costs for running the RO systems should be about half the amount currently used to produce the same amount of water by distillation, said WAPA COO Greg Rhymer. The final impact on customer costs depends on an array of factors still under negotiation, such as where the plants will be located and what the final terms with the builders will be, Rhymer said.
According to Boschulte, contracts have been finalized for work on St. Thomas, and are 85 to 90 percent complete for a second unit to join the one already in use on St. Croix. Construction on St. Thomas should begin in January and be complete next October. St. Croix work should take a similar amount of time, but a firm timeline cannot be determined until a contract has been worked out, Boschulte said.
Georgetown Consultants recommended several conditions on the new LEAC charge, requiring WAPA to file its final contract for the St. Thomas R.O. plant and a timetable for installation within 15 days, and setting tight deadlines for WAPA to provide a construction timetable. The PSC extended the deadlines somewhat when WAPA officials objected the timeframes were too short, but said they could provide those within 60 days.
The final order requires WAPA to file the St. Thomas contract and timetable within 60 days, and a complete maintenance plan for all of its generating units within 30 days. Also within 60 days, WAPA must provide an estimate of the anticipated cost savings from the two RO plants.
The PSC also heard testimony from V.I. SeaTrans’ Captain Marjorie Smith about the status of the St. Croix-St. Thomas ferry run. The ferry route has been out of service since July 4, when the Royal Miss Belmar, the ship running the route, wrecked off St. John. The vessel should be out of dry-dock by Oct. 21, Smith said. But resuming service may have to wait until the V.I. Government releases $400,000 in government subsidies because the company cannot pay its vendors, and cannot pay the owners of the Royal Miss Belmar for its lease until that happens, she said.
Present at the meeting were: Donald “Ducks” Cole, Sirri Hamad, M. Thomas Jackson, and Elsie Thomas-Trotman. Ex-officio member Alicia “Chucky” Hansen also participated. Commission member Verne David was absent.