Will Virgin Islanders’ Water and Power Authority bill go up or down? This was the question behind much of Tuesday’s discussion between Public Services Commission commissioners and the Water and Power Authority representatives. The answers were mostly conjecture.
The much-touted energy-efficient Wartsila generators are not giving an answer. WAPA’s Executive Director, Karl Knight, reported to the commission that three were offline. WAPA was waiting for Wartsila’s team of experts to arrive on the island and fix them; he pointed out that the repairs were covered by warranty. The generators that came online recently have been promoted for half a dozen years to bring cost savings to residents; residents are still waiting to see those savings.
WAPA’s freedom from Vitol was also discussed. WAPA can now go on the market and purchase fuel elsewhere, which could result in lower fuel costs. Last year, it paid $145 million to get out of contract obligations to Vitol.
According to the Financial Times, in 2021, Vitol handed senior executives and staff a record payday, giving more than $7 million to each of the London-run oil trading company’s nearly 400 partners.
The U.S. Justice Department reported last year that a jury in Brooklyn convicted an employee of the company for his role in a scheme to bribe Ecuadorian and Mexican government officials and to launder money to secure contracts worth hundreds of millions of dollars for Vitol. According to court documents and evidence presented at trial, Javier Aguilar, Houston, paid more than $1 million in bribes to officials of Petroecuador, the Ecuadorian state-owned oil and gas company, and PEMEX Procurement International, a subsidiary of PEMEX, the Mexican state-owned oil and gas company, to obtain lucrative contracts for Vitol.
WAPA agreed to the buyout deal with Vitol in 2023. The company had an agreement with Vitol in 2013, which included converting WAPA generators from diesel to propane. The deal was supposed to save WAPA money.
Sen. Kenneth Gittens has shepherded a bill through the Senate to hire a special investigator to examine the deal. According to his office, nothing has occurred concerning the bill, and he is waiting to see if an Inspector General’s Audit of WAPA looks specifically at that deal.
David Hughes, vice chairman of the commission, said that it would be advisable for WAPA to present documents concerning fuel bids before signing any contracts for future oil supplies. Knight, who was not with WAPA when the Vitol deal was negotiated, said WAPA would work with complete transparency and present an analysis of potential fuel vendor contracts to the commission and other pertinent information.
Hughes said that cooperation would prevent trouble further down the road.
Water produced and never paid for also drives up the cost of water for the authority and, consequently, the customer. On some St. Croix lines, 70 percent of what was produced might not get paid for. Knight pointed out that doesn’t mean all the water leaks out of the system. He said some unpaid water goes for flushing, and some is stolen.
PSC attorney Boyd Sprehn told the Source that WAPA’s line losses sometimes approached 40 percent before a flushing program began to keep St. Croix water free of particulates.
Pedro Williams, Clement Magras, Laura Nichols-Samms, David Hughes, and Raymond Williams attended Tuesday’s meeting.
