After no one showed up at a Monday public hearing on St. John and a single person attended on St. Thomas last week, residents of St. Croix turned out in force to offer testimony to the Public Service Commission as it deliberates an increase to the V.I. Water and Power Authority’s base rate for electricity.
Nine residents, many of whom were business owners, offered testimony Tuesday evening opposing the proposed increase, while many more came to watch the proceedings. None spoke in favor of the increase.
The closest thing to public support was a comment made by Mark Eckard, president of the St. Croix Chamber of Commerce, who acknowledged that the PSC and WAPA understood the workings and the needs of the power system better than he did, and they should make an educated decision based on their knowledge.
“Nevertheless, at this particular moment in time, a hike in WAPA’s base rate is nothing less than a slap in the already bruised face of St. Croix’s businesses,” he continued.
All of the testifiers made the same argument: that the territory as a whole, and the cash-strapped island of St. Croix in particular, simply could not afford any increase in its already high energy costs.
Testifiers argued that any increase would close businesses, scare away investors and be a heavy burden on the island’s residents.
“I’m finding it more and more difficult to continue my life here,” said Robert Quinn, a 27-year resident of the territory.
Quinn said he wanted the Virgin Island’s to thrive but energy costs were negatively impacting his business and his personal finances.
“I’m at a breaking point,” he said.
Hugo Hodge, executive director of WAPA, briefly spoke at the hearing to clarify the why the authority was seeking the increase.
Hodge said the majority of the funds would go towards improving WAPA’s infrastructure and making up for years of deferred maintenance. This, he said, would ultimately aid ratepayers.
“It is impossible to run any business without investing money into the business for it to operate in the most efficient manner. What we’re speaking about are the capital projects, the efficiency projects, the line loss projects. The projects that make the authority run more efficiently,” he said.
Hodge speculated that the increased efficiency could result in savings that would ultimately make up for the current rate hike and lower rates in the future.
Simone Palmer, a business owner, responded that she understood WAPA’s position, but said she feared the rate increase could be too much for some businesses to bear.
“I hear what you’re saying, Mr. Hodge. Having been self-employed since 1987, I know what it is to reinvest in a business in order for it to grow,” she said.
“I definitely believe you need to look at ways to do that without putting all the other businesses out of business, because there’s a huge change in how many businesses are operating today compared to six or 12 months ago.”
WAPA petitioned the PSC for the rate increase on Nov. 16, 2012. The authority is seeking an increase of $18 million in its yearly revenues, which they estimate would require a 2.5 cent per kilowatt hour increase to the base rate and would amount to $10 per month more for the average customer.
They are also seeking to have an interim revenue increase of $8.6 million, which was granted on July 6, 2012, made permanent. This amount is already represented in ratepayers’ bills.
WAPA says the increase is necessary due to a number of factors including increasing expenses, shrinking energy sales in 2011 and 2012, increases in debt service payments and slow payment of bills by certain government agencies.
Georgetown, the PSC’s consulting firm, studied WAPA’s petition and issued a report calling for a much smaller increase to the base rate.
Georgetown recommend making the $8.6 million interim increase permanent, but then only granting an additional $3.65 million increase, $14 million less than WAPA is requesting.
Despite recommending against the increase, Georgetown acknowledged that WAPA’s base rate was too low and had been for some time. It chided the authority in its report for not requesting a rate increase sooner.
The base rate, which is separate from the LEAC, was last raised in 2009.
After the meeting, Hodge replied to that criticism by saying the authority had delayed asking for a base rate increase to spare ratepayers added expense, adding that WAPA has tried to balance its books in other ways.
“We hear this,” he said, referring to the negative testimony given during the hearing. “So that’s why we don’t come back to them (the PSC) for money every time we see there’s a need. We try to find ways to cut first.”
The public hearings on all three islands were a necessary step for the PSC to raise the base rate. Kye Walker, an independent attorney who has functioned as hearing examiner throughout the process, will now weigh the public comments in her report to the PSC. The PSC will then decide whether or not to raise rates and by how much.
A date for the final PSC vote has not yet been set.
