At the end of a heated meeting with the V.I. Water and Power Authority on Wednesday night, Public Services Commission members voted for a slight decrease in the Levelized Energy Adjustment Clause rates but also mandated officials come forward with a plan to deal with outstanding government payments that the PSC said has "severely stressed the authority’s cash flow."
According to the PSC’s motion, the electric LEAC will drop from $0.412692 to $0.401807 per kilowatt hour, while the water LEAC rate will drop from $12.10 per every 1,000 gallons to $10.85.
WAPA initially requested a $1.06 increase in the electric LEAC, which PSC advisors Georgetown Consulting Group did not agree with, but after a 10-minute recess, it appeared that both sides were on the same page.
These rates will be in effect from April 1 to June 3 and PSC members required WAPA to file any petition for revised rates by May 15.
While there was a long back-and-forth discussion between WAPA and the PSC raising or dropping the LEAC, one thing everyone did agree on is that the authority is being "adversely impacted" by outstanding government payments, particularly bills owed by the territory’s hospitals and for the local streetlighting program.
Both sides also agreed that there’s no cure for the problem but, in the end, the PSC told WAPA to try putting together a proposal that would get the delinquent payments in without affecting customers who pay on time.
"The central government has been responsive in paying us,” WAPA Executive Director Hugo Hodge Jr. said. “The problem that we have is that the two hospitals and the streetlighting program owe almost $30 million of the $37 in arrears."
"But we can’t turn off the hopsitals or the streetlights,” he added, “and it’s a situation that has become a lot bigger than we give it credit for. It needs reform: the hospital can’t pay its bill under the current structure and, unless some entity – maybe the Legislature – does some restructuring, I don’t know if we’ll ever see change in this regard."
Hodge also suggested that a surcharge for streetlighting be added to utility bills instead of property tax bills, which he said would cut out the lag in payment, particularly from those individuals that don’t pay taxes.
As WAPA and PSC members – who said they would continue to "monitor the situation" – talked over a solution to the problem, a report provided by Georgetown was discussed that shows the outstanding bills have cost ratepayers about $200 million during the years since they have forced WAPA to defer the kind of maintenance that could have made its plants more efficient.
The PSC also granted WAPA’s petition for a one-year extension of the Rate Financing Mechanism, a surcharge that has been appearing on ratepayers’ bills to cover efficiency improvements.
