Public Services Commission members on Thursday approved two power purchase and interconnection agreements that would put another six megawatts of solar power on St. Croix.
The agreements with St. Croix Solar I and St. Croix Solar II are for 25 years each with an option for the V.I. Water and Power Authority to renew for another five years. The two facilities, to be developed by the solar company, are proposed for Estate Granard on the eastern end of the island and Estate White Bay in the west.
The two facilities will add a combined six megawatts of electricity to the four already being generated by WAPA’s plant in Estate Spanish Town and, altogether, are expected to cover approximately 40 percent of St. Croix’s peak power demand, officials said.
According to the agreements approved by WAPA’s governing board in January, St. Croix Solar will build, develop and operate the generation facilities, while WAPA will pay for the energy, capacity attributes, environmental benefits and other products produced.
Meanwhile, the company has to stay on track with certain timelines for securing permits, closing on the financing, and getting the facilities up and running.
If the milestones are not met, the company can pay WAPA to extend the deadlines and avoid default under the power purchase agreement. WAPA, however, may choose to terminate the PPA extension if payments are not made or if “the facilities are not developed and completed in a timely manner,” according to the documents.
Once the plants are operational, WAPA is obligated to buy 100 percent of the power produced, though there are exceptions in case of emergencies or outages.
The PSC also moved forward Thursday with another proposal already approved by the WAPA board: to reestablish a program that would allow WAPA to hedge up to 75 percent of the price of liquefied propane gas and any other fuel source it uses for two years, beginning immediately.
The PSC first approved the fuel hedge program in 2008, allowing WAPA to stabilize fuel costs by establishing a mechanism known as a "costless collar," which set an anticipated cap price and floor price for fuel. When the cost of fuel exceeded the high price, the fuel hedging program kicked in and allowed WAPA not to pay anything above the cap price.
In its current form the program would also allow WAPA to buy cheaper propane over the next two years, which officials said is advantageous as costs continue to decrease. In previous board meetings, WAPA Executive Director Hugo Hodge Jr. has said that there are no upfront expenses associated with the program and that the authority may already have partners willing to go in on buying the low-cost fuel.
Savings from the program are passed straight to the ratepayer, according to Hodge.
Present during Thursday’s meeting were PSC board members Johan Clendinen, M. Thomas Jackson, Andrew Rutnik and Joseph San Martin.
