A judge has given the V.I. Water and Power Authority a reprieve of sorts, staying — for now — the execution of a writ that would have seen some $6.8 million disbursed from the utility’s FirstBank account on Monday to a creditor in a long-running lawsuit.
WAPA filed an emergency motion on Wednesday in Puerto Rico District Court, seeking to stay the order because it said it plans to appeal the decision. The utility has argued that the writ should be dissolved, claiming that its accounts are located outside of Florida, operate solely in the U.S. Virgin Islands, and are protected under the territory’s sovereign immunity laws.
Power Rental Op Co., LLC sued WAPA in February 2020 in Florida District Court over $14.2 million it alleges was owed under a rental agreement for power generation equipment and water treatment systems. It prevailed and WAPA was ordered to pay $6.5 million and another $349,279 for attorney fees and costs. The company subsequently removed the case to Puerto Rico, where it registered its judgment from Florida in February and in March was granted writs of execution to collect on its debts.
WAPA’s bank accounts were frozen on April 16 when the U.S. Marshal served the writ “on First Bank Virgin Islands in Puerto Rico, levying approximately $6.9 million of WAPA’s funds,” as well as $1.4 million in a Banco Popular account, according to an emergency motion to quash the order that the utility filed two days later, on April 18.
On May 8, the court granted WAPA’s emergency motion in part — quashing the writ pertaining to Banco Popular but leaving it in place for FirstBank. Because the writ was for some $6.8 million (with interest accruing), and the FirstBank account contains sufficient funds to cover that amount, there was no need to also freeze the Banco account, Judge Maria Antongiorgi-Jordan ruled.
The judge subsequently issued her opinion and order on May 31, meaning an automatic 30-day stay under the Federal Rules of Civil Procedure will expire on Monday, freeing up the money Power Rental says it is due.
On Friday, she issued a three-sentence order staying the execution of the writ until WAPA’s pending motion to stay is resolved. Power Rental has until July 11 to file its response.
WAPA wants the funds to remain in the bank until its appeal concludes, which could take one to two years, and to forego posting a bond to guarantee the amount “as there is no risk to the parties pending the appeal because the funds are in possession of FirstBank,” according to the motion.
If a bond is required, WAPA is asking that the amount be “for very minimal costs” because paying anything will result in a hardship — and possibly rolling blackouts for customers of the cash-strapped utility that is operating under a local State of Emergency that Gov. Albert Bryan Jr. declared on April 22, and which the V.I. Legislature voted to extend for 90 days on June 24.
WAPA has been dangerously short on funds in part due to U.S. Virgin Islands agencies themselves — the territory’s hospitals and the V.I. Waste Management Authority owed the utility approximately $11 million in past-due bills — and because it costs more to produce electricity than WAPA collects from ratepayers. Bryan bypassed waiting for normal Senate approval to tap directly into the territory’s $21 million Budget Stabilization Fund — also known as the Rainy Day Fund — to cover WAPA’s immediate obligations.
Meanwhile, CEO Andrew Smith Smith resigned abruptly June 3, opting not to renew his contract while also accepting a $50,000 performance bonus stipulated in his contract. At an emergency meeting on Friday, the governing board voted to name Ashley Bryan, chief operating officer for electricity, the interim CEO.
