If all goes as planned, propane storage tanks could begin arriving in the territory in a month or so and Virgin Islanders could pay be paying 30 percent less for electricity by the fourth quarter, Hugo Hodge, executive director of the V.I. Water and Power Authority, said Friday.
“I envision the fourth quarter this year,” Hodge said, adding he can hardly wait for the Public Services Commission meeting to request lower rates.
A groundbreaking ceremony for the Estate Richmond propane terminal was held at WAPA power plant Friday afternoon, following a similar event Thursday at the Randolph Harley Power Plant on St. Thomas.
The project has begun on St. Croix and the ceremony took place under a tent in front of the deep excavated pit near the water’s edge.
Hodge addressed the crowd of dignitaries, WAPA employees and students from the Juanita Gardine Elementary School who performed the National Anthem. He talked about benefits of using propane with fuel and solar power to energize the territory. The propane conversion will save ratepayers 30 percent on their utility bills, he said.
“With a 30 percent reduction in cost, the $90 million it will save is truly a game changer. Every person in the territory will have additional income,” Hodge said. “Game changer” is the name given to the project by WAPA personnel.
WAPA Board President Gerald Groner talked about the development of project. In 2008, after oil prices skyrocketed, he said, the board began exploring alternative energy and decided to use wind, solar and fuel. Waste to energy had been deemed “a fiasco.” The propane conversion tanks will be able to burn oil, natural gas as well as propane if necessary, he said.
“We will never be hostage to the price of one commodity again,” Groner said.
Other speakers included Delegate Donna M. Christensen, Gov. John deJongh Jr. and Richard Elliott, project manager for Vitol Virgin Islands, WAPA’s contractor.
DeJongh, a former WAPA executive director, commended the authority’s team and talked about the importance of reasonable utility rates for residents and prospective investors, who ask first about energy costs and education when considering a move to the territory.
“This is more than just a transformation of the utility. It is a transformation of St. Croix,” deJongh said.
Likewise, Christensen congratulated WAPA staff and commended the executive director and team board that, she said, “listened to the people of the Virgin Islands.”
Both islands are slated to begin conversion to propane as soon as 18 ready-made tanks arrive from Belgium. Ten tanks will be shipped to St. Thomas and the remaining eight will be installed on WAPA’s shore line, Hodge said.
Elliott said some of tanks have been built, tested and are ready to ship. The St. Croix tanks weigh 285 tons each and are about 150 feet long, 20 feet across and almost 33 feet high.
Hodge said the tanks will be surrounded or “mounded” with a material to minimize contact with oxygen, a fire hazard, and surrounded by a retaining wall.
In the next two months, before the tanks arrive, the ground will be cleared and stabilized and a concrete slab will be laid on the surface, according to Elliott.
“Our goal is (completion) this year. There are a number of variables and, despite the best plan, you’re going to come into things that are unknown,” Elliott said.
Hodge and Elliott have been to Belgium to inspect the tanks, and Hodge said he has seen the tanks in production and personally tested the safety devices. Hodge said he is “100 percent confident with the manufacturing and safety of these tanks,” that performed at “three times what we’ll use them for.”
“We are here to build,” Elliott told the audience and “insure that everyone goes home safely.”
Vitol Group, with offices around the world, is one of the world’s largest independent energy trading companies and has developed energy terminals in Europe, Africa, South America, the U.S. and other regions.
All upfront capital costs to complete the V.I. conversion are being financed by Vitol. The company has already committed more than half of estimated $91 million cost, according to WAPA.
Hodge said Vitol “pledged” to hire as many Virgin Islanders as possible and Elliott said that, outside of his small engineering staff, most of the work will be completed by local workers. He estimated a peak work force of about 100 employees.
Most of the Vitol projects Elliott has managed were located in the desert or industrial neighborhoods. Elliott, who is from the Netherlands, said he likes the Virgin Islands – for the weather and being able to work in community.
“It’s not often you work in a project where there are 105,000 shareholders. It gives it a new dimension,” he said.
Hodge was exuberant talking about the propane project and said he enjoyed the student participation at the groundbreaking. Gardine Elementary has recently become a WAPA-sponsored school and Hodge said he hopes they can include students in more activities.
After the ceremony and reception, Hodge was seen dancing merrily with his staff.