A contractor brought on to provide power generators and related equipment for the Water and Power Authority is facing a $19 million breach of contract lawsuit, but lawyers for the company say WAPA is taking its legal complaints to the wrong courthouse.
In documents filed in both local and federal courts on St. Thomas, each side gives its own reason why major equipment supplied to the Randolph Harley Power Plant on St. Thomas didn’t perform the way it was supposed to, according to the terms of a modified equipment rental agreement.
APR Energy is a U.K.-based company with offices in Florida that serves utilities, governments and power industries with supplemental equipment and systems, according to its website.
When the company acquired the power equipment rental business from General Electric International in 2013, it also took over the deal to supply WAPA with a TM2500+ turbine. That became Unit 25 at the St. Thomas plant.
Along with that order came equipment to install, operate and maintain the turbine and a mobile reverse osmosis machine.
Court documents filed by both WAPA and APR also detailed the change orders that followed – 13 in all – including two more leased turbines with related equipment and services. They became WAPA’s Units 26 and 27 at the Harley power plant.
WAPA asked that the second additional turbine come with the capability to use liquefied propane.
Unit 26 would be converted to use propane as an alternative fuel with equipment already supplied by APR and its partner supplier, Power Rental OpCo.
But in the lawsuit, WAPA officials said the alternative fuel conversion of Units 26 and 27 did not turn out as expected. The option of switching from fossil fuel to the less expensive propane was eliminated and, court documents said, the performance of the Harley Power Plant suffered.
WAPA said APR and its partner supplier, OpCo, were responsible for a series of power outages caused by leased equipment failures and for $19.1 million in cost overruns and damages.
APR, in its most recent court filings, had a different version of events. Lawyers for the company said WAPA failed to pay the full amount of the monthly rental fees for their leased equipment.
They pointed to the terms offered in the 13th change order, which said:
“Any claims by WAPA in connection with WAPA’s use of diesel fuel instead of propane” would be dropped if APR agreed to release the utility “with respect to all amounts owed” prior to the effective date of the 13th change order.
As of May 1, 2019, the unpaid portion owed to OpCo by WAPA was $14.3 million.
What the parties did not change, however, were the terms spelled out in the agreement about settling disputes. By the terms of the deal, if senior management of both parties could not settle their differences among themselves, they could seek legal redress through the federal court in the Southern District of New York.
The motion for change of venue filed in District Court on St. Thomas on March 18, asks for the proceedings to be moved there.
V.I. District Court Judge Robert Molloy, who would most likely have presided over the lawsuit on St. Thomas, has recused himself from the case.
