PSC Rescinds Temporary Base Rate Increase Until WAPA Dispute is Resolved

An hour long back and forth between the Public Services Commission and the V.I. Water and Power Authority led to the denial Thursday night of one petition for reconsideration and the reversal of a PSC order made last month on a temporary base rate increase for the authority.

Earlier in January, the PSC voted to lower Levelized Energy Adjustment Clause rates and move one infrastructure surcharge from the LEAC to the base rate, resulting in slight increase for customers using an average of 250 kilowatts. An approximately 13 percent interim base rate increase was also passed, affecting those customers using more than 250 kilowatts and raising their bills about $16.20 per month.

The increases were meant to give WAPA more working capital for the purchasing of more efficient generators, among other things, but PSC members voted to rescind them for now after WAPA said they needed more time to go over the other items included in the interim base rate agreement, which WAPA Executive Director Julio Rhymer acted on after only three days notice and with little time for the authority to review.

Public Services Commission member Johan Clendinen, who spoke forcefully against WAPA during the first part of Thursday’s meeting, said he believed WAPA would move forward “in good faith” that the two sides would “work it out” and that the suspension of the increase was only temporary.

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Clendinen, along with PSC member David Hughes, was upset earlier in the meeting by another petition for reconsideration filed by WAPA, which he said dealt with the PSC’s jurisdiction to hire a specific consulting firm to evaluate whether WAPA had put in place certain recommendations that came out of a management audit conducted in 2014.

The Water and Power Authority said its issue was not with the PSC’s jurisdiction but the fact that it hired the same consulting firm for the evaluation as WAPA had hired to conduct the audit. The firm, Vantage Energy, has not been working with either side since the dispute started, PSC attorney Boyd Sprehn said Thursday.

Sprehn said, “WAPA objected to the PSC retaining Vantage Energy and said it would be conflict of interest. Without getting into the merits of the argument, WAPA’s petition went to the payment of invoices for Vantage, who hasn’t been working with the PSC for some time over the dispute.”

Mediating the argument for most of the meeting was PSC Chairman Andrew Rutnik, who said that the PSC should remember that without WAPA payments from WAPA on assessments, the PSC would “shut down” after a week or “two weeks max.”

“We need to work with WAPA,” he said.

Speaking after the meeting, Rhymer said he doesn’t know how taking away the base rate increases will immediately impact WAPA’s bondholders, but said he would work with the PSC staff on working through the points in the interim rate agreement to come up with a resolution.

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