PSC Says WAPA Keeping It In Dark About Fuel Supplier Dispute

The Water and Power Authority has not given the Public Services Commission information about billing and payment problems with its fuel producer, and members learned about it through news reports, PSC officials said in a statement Monday.

WAPA reported over the weekend that VITOL; its propane supplier and contractor for converting generators to propane use, suspended deliveries as of last Thursday due to a contract dispute. WAPA Executive Director Julio Rhymer said WAPA has switched back to fuel oil during the impasse and that there would be no service interruption. (See Relate Links below)

WAPA officials listed several factors they said led to the cash shortfall. They pointed to outstanding hospital utility bills and unpaid streetlight bills, which exceed $26 million right now; more than $3.9 million in “assessments” by the PSC to pay its consultants to help regulate WAPA, and a delay in establishing a base rate that will cover its actual expenses.

In a statement from PSC spokesperson Lorna Nichols, PSC officials complained that “WAPA has not provided any information to the Commission as to why the Authority is unable to pay its fuel supplier, if that is in fact the current problem.,” and that “(d)espite filing for a new LEAC on March 30, and despite the on-going efforts to resolve WAPA’s base rates, WAPA failed to deliver either the February 23, 2017 or the April 19, 2017 notice from VITOL to the Commission or advise why this has reached crisis status.”

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The PSC took issue with WAPA’s account of the reasons for its financial woes, seeming to suggest WAPA actually has sufficient revenues and is being deceptive, saying the “costs of the VITOL provided propane have been collected through the LEAC since WAPA began using that fuel,” and that VITOL’s operations and maintenance costs were also authorized in the fuel surcharge and later in the base rates.

But “apparently those funds collected from ratepayers have not been paid to VITOL,” the PSC statement said.

The PSC statement makes no mention of the $26 million – plus outstanding government utility bills and says the PSC “has no information that explains WAPA’s inability to pay its current fuel costs.”

It does respond to WAPA’s criticism of $3.9 million in PSC assessments, saying “The regulatory costs (assessments) which WAPA uses as a distraction are a normal part of utility operating costs, here as elsewhere in the United States.”

The assessments have also not been paid, according to the PSC, and “are significantly less than one percent of the revenues of WAPA, and have more than paid for themselves over the years.” Most of WAPA’s revenues are pass-through payments to fuel suppliers.

The PSC statement also mentions payment disputes WAPA has had with fuel oil suppliers Glencore and Trafigura. Glencore was paid after a special government appropriation. Trafigura filed suit in 2016 for $26.6 million in payment for oil already delivered. The dispute is still in court.

WAPA has been struggling financially for many years and its credit rating was downgraded to junk status in 2016.

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1 COMMENT

  1. It seems that all players in this situation are locked into an eternal theatrical performance. The illusion that any of these entities (VIG, WAPA, PSC) are run by competent people has been shattered, and yet they continue to perform their grotesque parts with grim determination. One reason for the ignorant and willful continued use of fossils fuels is stated below:

    “From a systemic perspective, corruption and an ingrained public mistrust of government officials and electric utilities complicate solar power project development. Typically, regional electric utilities are government-owned, or at least have extremely close ties with elected government officials and bureaucrats, and in general have histories of poor performance.

    Furthermore, the degree of public transparency and accountability of regional power utilities and governments has been and continues to be poor, well below international standards. Associated with this, a lack of data for energy production, costs, sources and uses is another obstacle, U.S.-based GTM Research points out in its April 2015 research report, ¨Solar PV in the Caribbean: Opportunities and Challenges.¨”

    While this report encompasses the general practices in the Caribbean islands, it could be referring directly to the USVI. Obviously other people see the solution to our energy problems here, but are reluctant to enter into agreements with Caribbean islands due to the reasons stated above.

    However, many islands have started to see the (sun)light. Aruba, Grenada, St.Lucia, Turks and Caicos, Caymans and others, have developed and executed strategies to be completely, or almost completely fossil fuel free and energy independent.

    To be fair, WAPA has allowed the installation of a solar array in Donoe, but it supplies a tiny portion of energy, and while it looks like it’s being maintained, one gets the sense that they only did this as a half-hearted gesture, maybe to throw a bone at the critics of their fossil fuel obsession.

    WAPA (and the VIG) cannot continue to hide their incompetence, dishonesty, and willful stubbornness any longer, as clearly demonstrated by the recent events. And yet there is still no shame in reverting back to the oil burners. AND while WAPA still refuses to open their books for an audit, they have the gall to demand more money. This albatross needs to be sold to someone who actually knows what they are doing.

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