Approving AEG Bovoni’s lease for a St. Thomas refuse-derived-fuel plant is either a step toward meeting federal demands the territory close its dumps while lowering utility bills, or a scam that will doom recycling, depending on which testifiers one believed in Senate hearings Tuesday.
This is the second time the AEG lease has come before the V.I. Legislature for consideration. The V.I. Water and Power Authority and V.I. Waste Management Authority signed agreements with AEG Bovoni in 2009 for AEG to build trash processing facilities on St. Croix and St. Thomas, and to make refuse-derived-fuel (RDF) pellets to feed trash-to-energy plants it would also build on St. Croix and St. Thomas.
Petroleum coke, at about a tenth the cost of fuel oil, would have boosted the power output, and plans initially called for a 32 megawatt plant on St. Thomas and a 16.5 megawatt plant on St. Croix, but, in the face of stiff environmental opposition, the V.I. Legislature voted down a lease for the St. Thomas RDF facility in March of 2010. Senators and residents objected principally to using the very inexpensive, but potentially dirty petroleum coke as a fuel.
The Legislature has to act because the St. Thomas property is government-owned. The St. Croix plant is planned for private property located on the island’s southern shore within St. Croix Renaissance Park, and does not need Legislative approval for the lease.
WAPA, WMA, and AEG worked out a scaled back proposal, with RDF plants in both districts, but only the single 16.5 megawatt power plant on St. Croix, and Government House again sent the lease for the St. Thomas facility to the Legislature for approval on Dec. 9.
Several individuals testified in opposition to the lease, all making similar arguments. Resident Rita Deferrary testified she believed the contract with AEG to be invalid because it was put out by WAPA, rather than WMA, but affects WMA more than WAPA- a point also argued by two League of Women Voters representatives. Also, AEG Bovoni had existed less than three years, disqualifying it from bidding under V.I. law, she said – points echoed by a series of individual citizens.
But the law refers to the parent company entering negotiations, and it is standard and normal for those companies to create local subsidiaries, said WMA attorney Iver Stridiron. The bidding process was done in coordination with WAPA because both organizations are partners in what is a single, complex project, and doing so is normal and legal, he said.
Sen. Janette Millin-Young relayed some residents’ concerns over the potential costs of the project, asking "if we pay you to take our waste and make it into fuel, then pay you again by buying electricity, how does that benefit the people of the territory?"
"It helps to lower energy costs, helps close the landfill, and it creates jobs," Alpine Energy Group President Don Hurd said, at which point WAPA Executive Director Hugo Hodge interjected that residents would be paying for these services anyway, and the deal with AEG lets them pay less than they would normally pay.
"If I may, there is a cost to disposing of the trash regardless, whether we ship it off island or whatever we do," Hodge said. "And we have to provide power to residents, and if we can purchase it for 14 cents per kilowatt hour, that is a cost savings to the consumer."
With the agreement with Alpine, WAPA and the territory get the benefits of a new system of waste disposal and some new power generation, without having to spend anything out of pocket, Hodge said. "Alpine is putting up all the capital," Hodge continued.
Several senators said they were sympathetic to opponents’ calls for recycling, but the clock was ticking on federal deadlines for closing the territory’s landfills.
"I get that recycling is the good thing to do, but does anyone here think we can roll out that type of recycling program in the time we have?" Sen. Nereida "Nellie" Rivera-O’Reilly asked.
"I have two priorities on this vote; one is closing our landfills and the other is the reduction of the LEAC (fuel surcharge on utility bills)," said Sen. Louis Hill. "So my question is how do we close the landfills in the time the EPA (Environmental Protection Agency) has given us?" he asked.
No votes were taken during the information gathering hearing on St. Thomas. A second hearing is scheduled for Wednesday evening on St. Croix.
Editor’s note: This story has been changed to reflect that Rita Deferrary did not represent the League of Women Voters.
