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PSC Aiming for May Deadline for WAPA Base Rate Hearings, No Final Schedule Set

The Public Services Commission had hoped to make a final decision on permanent electric system base rates by May, but on Wednesday, PSC members were told that they might want to tack another six weeks onto the schedule currently being finalized by the hearing examiner.

At a meeting on St. Thomas, Georgetown Consulting Group, the PSC’s advisors on V.I. Water and Power Authority matters, explained that a final schedule had not yet been set in the authority’s ongoing base rate case since the hearing examiner, attorney Bennett Chan, was still waiting on updated information from WAPA, including financials and updates on the purchase of new generators.

The base rate case was referred to Chan in late February after weeks of back and forth between the PSC and WAPA over an interim base rate agreement and increase that the PSC ended up rescinding.

The Public Services Commission first approved the interim base rate increase in early January, but voted two weeks later to rescind it after WAPA said it needed more time to go over the other items included in the iagreement negotiated between the two parties. At the time, WAPA Executive Director Julio Rhymer said the agreement was acted on after only three days’ notice and with little time for the authority to review.

Looking at the immediate impacts of the PSC’s decision two days later, Rhymer said that most immediately, the authority would have difficulty producing reliable power. Among other things, the increase was going toward the leasing of two additional units – Unit 25, which is on-island, and Unit 26, which is on its way to the territory – that were meant to increase reliability and give WAPA a chance to overhaul and convert Unit 23, which Rhymer said is two years overdue for maintenance.

Rhymer said that he would also be meeting with his legal team to discuss any other impacts or options and, a few days after, WAPA announced that it would be filing a motion for reconsideration with the PSC that would allow WAPA to implement the base rate increase on Feb. 1.

The PSC had 30 days to act on WAPA’s petition or the matter would be considered denied, but at a meeting on Feb. 22, the commission chose not to act but to instead refer the base rate portion of the case back to a hearing examiner.

While PSC chair Andrew Rutnik said at the time that pushing the matter back could cause “irreparable damage” as WAPA works to stabilize its power and put in place new generating equipment, members David Hughes and Johan Clendiden said that giving it back to the hearing examiner would allow both sides to start from the beginning and resolve “this mess.”

Hughes said that getting a hearing examiner involved would also resolve WAPA’s concerns over the lack of an evidentiary hearing, which the utility says by law should have been conducted before the PSC decided to rescind the interim rates.

During Wednesday’s meeting, WAPA said the holdup in information was now being caused by confusion about the start time for data, which, at the beginning, included a “test year” of 2017 for the implementation of a permanent base rate increase.

After another hour and a half of discussion, representatives from both WAPA and the PSC decided that this information, first filed in September 2016, could be used since it was the basis for the interim rate agreement and, once sent to the hearing examiner, both sides said they should also try to get as far along in the case by May as possible.

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