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Charlotte Amalie
Sunday, July 3, 2022
HomeNewsArchivesCourt Tosses Last of Hansen's LEAC Suit

Court Tosses Last of Hansen's LEAC Suit

V.I. Superior Court Judge Harold Willocks tossed out the last remaining question in Sen. Alicia "Chucky" Hansen’s lawsuit challenging the V.I. Public Services Commission’s approval of a July 1-Sept. 30, 2011 increase to utility fuel charges, according to the PSC. As a result, the PSC will also be able to charge $435,000 in interest on a loan to purchase fuel, as well as the fuel costs themselves, which the court previously upheld.

Hansen first petitioned the PSC for a stay and reconsideration of an almost 10 percent increase in the Levelized Energy Adjustment Clause rates, the name of the fuel surcharge that goes up and down several times a year in response to rising and occasionally falling petroleum prices. The PSC denied Hansen’s petition in July 2011.

Hansen then sought a restraining order, but Willocks suggested the plaintiffs were skipping a step and should first appeal the PSC’s ruling. After appealing to the PSC unsuccessfully, Hansen filed suit, raising three legal issues:

  • The V.I. Water and Power Authority failed to comply with a legislative mandate to hold public hearings;
  • The petition for a LEAC increase should not be based on the fluctuation of oil prices on the market and the cost of WAPA refinancing its $40 million fuel-purchase loan, but only the specific prices negotiated for WAPA in the territory’s third extension agreement;
  • The PSC had insufficient information to consider the interest payments on WAPA’s loans as a factor to increase the LEAC.

Willocks dismissed the claim that WAPA failed to comply with a legislative mandate to have public hearings. WAPA once set rates, but in 1973, then-Attorney General Vern Hodge held the PSC had jurisdiction over rate-setting. Since that time, the PSC, not WAPA, has set rates, so the PSC is the body that must have public hearings, Willocks said. The PSC did hold public hearings.

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Willocks did not directly confront the question of what the PSC should consider when looking at a LEAC, saying the PSC created the LEAC as part of its rate-setting role, and the PSC has both the responsibility and the authority to determine reasonable rates.

"In essence [Hansen] is asking this court to substitute its judgment for that of the PSC. This would be a violation of Virgin Islands law," Willocks wrote. "[W]hat is really telling here is [the law] does not give the court the authority to determine if the rates were just and reasonable. Nor… what information must be considered when fixing rates."

Willocks remanded the last question – whether or not the PSC had enough information about interest payments on WAPA’s fuel loans – back to the PSC for "an appropriate finding."

The PSC gave the court those details in February, and on June 8, Willocks issued his ruling, dismissing the entire suit and affirming the original decision of the PSC.

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V.I. Superior Court Judge Harold Willocks tossed out the last remaining question in Sen. Alicia "Chucky" Hansen's lawsuit challenging the V.I. Public Services Commission's approval of a July 1-Sept. 30, 2011 increase to utility fuel charges, according to the PSC. As a result, the PSC will also be able to charge $435,000 in interest on a loan to purchase fuel, as well as the fuel costs themselves, which the court previously upheld.

Hansen first petitioned the PSC for a stay and reconsideration of an almost 10 percent increase in the Levelized Energy Adjustment Clause rates, the name of the fuel surcharge that goes up and down several times a year in response to rising and occasionally falling petroleum prices. The PSC denied Hansen's petition in July 2011.

Hansen then sought a restraining order, but Willocks suggested the plaintiffs were skipping a step and should first appeal the PSC's ruling. After appealing to the PSC unsuccessfully, Hansen filed suit, raising three legal issues:

  • The V.I. Water and Power Authority failed to comply with a legislative mandate to hold public hearings;
  • The petition for a LEAC increase should not be based on the fluctuation of oil prices on the market and the cost of WAPA refinancing its $40 million fuel-purchase loan, but only the specific prices negotiated for WAPA in the territory's third extension agreement;
  • The PSC had insufficient information to consider the interest payments on WAPA's loans as a factor to increase the LEAC.

Willocks dismissed the claim that WAPA failed to comply with a legislative mandate to have public hearings. WAPA once set rates, but in 1973, then-Attorney General Vern Hodge held the PSC had jurisdiction over rate-setting. Since that time, the PSC, not WAPA, has set rates, so the PSC is the body that must have public hearings, Willocks said. The PSC did hold public hearings.

Willocks did not directly confront the question of what the PSC should consider when looking at a LEAC, saying the PSC created the LEAC as part of its rate-setting role, and the PSC has both the responsibility and the authority to determine reasonable rates.

"In essence [Hansen] is asking this court to substitute its judgment for that of the PSC. This would be a violation of Virgin Islands law," Willocks wrote. "[W]hat is really telling here is [the law] does not give the court the authority to determine if the rates were just and reasonable. Nor... what information must be considered when fixing rates."

Willocks remanded the last question – whether or not the PSC had enough information about interest payments on WAPA's fuel loans – back to the PSC for "an appropriate finding."

The PSC gave the court those details in February, and on June 8, Willocks issued his ruling, dismissing the entire suit and affirming the original decision of the PSC.