St. Thomas 𑁋 The Water and Power Authority is under increased scrutiny as public officials work to stabilize a deepening energy crisis in the territory. WAPA failed to make a scheduled December payment to Vitol, the multi-national propane supplier it contracted, which resulted in a halt in propane deliveries and several generators going offline.
Public Service Commission on December 12th voted to:
- Lower the LEAC by approximately 3 cents per kilowatt-hour;
- Take no action on a base rate petition pending before the commission that would have resulted in no change to ratepayer’s overall bills;
- Allow the leased generation surcharge authorization to expire at the end of 2019.
At an emergency press conference on Saturday, Governor Albert Bryan Jr. said to reporters that the U.S. Virgin Islands is currently facing an energy crisis. Last week, WAPA petitioned the Public Service Commission to reconsider its decision on December 12th, in which the commission lowered the fuel surcharge, known commonly as the LEAC. In preparation for an investigative hearing that took a dive into WAPA’s finances, the 33rd Legislature subpoenaed 29 records from executives and probed officials about transparency and accountability.
The Byan administration, in coordination with officials at WAPA and senators, said they had agreed on a tentative $3 million-per-month to offset the utility’s delinquent debt with the propane distributor. As discussions continued, the figure was raised to $6 million and will be appropriated through the miscellaneous section of the government’s fiscal budget for 2020.
WAPA said that as a result of the PSC’s action, it will not be possible to meet its payment obligations to its LPG fuel supplier, Vitol and will be unable to purchase the lower cost propane fuel. Without the necessary propane used to diversify how electricity is generated at its power plants, WAPA will be forced to utilize the more expensive No. 2 fuel oil to generate electricity in the territory.
As a result, WAPA will also fall short of meeting energy demands for customers territory-wide. Senate President Novelle Francis told the Consortium Monday that the Bryan administration and WAPA executives met again with senators following the emergency meeting held over the weekend to discuss the status of the territory-wide energy crisis. Bryan stated for the first time publicly this weekend that the U.S. Virgin Islands is experiencing an energy crisis as a result of WAPA’s default status with its only propane supplier.
This comes a year after WAPA paid multiple invoices in 2018 totaling $2.17 million carried out by an email scam now being investigated by the FBI.
Previous Week’s Timeline
- Thursday, December 12th — The Public Services Commission lowered the fuel surcharge, known commonly as the LEAC, took no action on the base rate petition and allowed the lease generation surcharge to expire at the end of 2019.
- Monday, December 16th – WAPA Communications announces the December 20th meeting scheduled for WAPA’s Governing Board.
- Tuesday, December 17th – WAPA petitions the Public Service Commission for reconsideration to lower fuel surcharge after December 12th decision.
- Thursday, December 19th – Bryan/Roach Administration issues an additional $16.1 Million in income tax refunds, bringing the total to $63.8 million since Governor Albert Bryan Jr. and Lieutenant Governor Tregenza A. Roach took office in January.
- Friday, December 20th (4:38 p.m.) – Governor Bryan Calls 33rd Legislature into Emergency Meeting to Discuss V.I. Water and Power Authority.
- Friday, December 20th (8:55 p.m.) – Vitol declares WAPA in default and will suspend propane deliveries on each island the following day.
- Saturday, December 21st – Propane deliveries cease in the territory, members of the 33rd Legislature and Government House both hold emergency session via teleconference to discuss WAPA’s status with Vitol.
- Saturday, December 21st – Governor Bryan tells reporters via teleconference his administration and senators have tentatively agreed to assist WAPA and prevent the territory’s energy crisis from deepening. The figure proposed by officials is $3 million to resume propane deliveries.
- Sunday, December 22nd – Senate President Novelle Francis Jr. shares updates about Saturday’s special session and the Legislatures stance on stepping in to assist WAPA.
- Monday, December 23rd — Government House meets with members of the 33rd Legislature following an emergency meeting held the previous weekend. Both agree to a cash infusion of $6million dollars to settle WAPA’s debt with Vitol.
- Monday, December 22nd — Congresswoman Stacey Plaskett came out in support of Governor Albert Bryan Jr. and the 33rd Legislature as both branches of government continued working to resolve the crisis. Plaskett still maintains her stance on declaring a state of emergency to address the territory’s energy shortfalls.
Diesel Power Will Cost USVI $200,000 Daily
WAPA said in a statement, “The LEAC must now be based on the fact that propane fuel will not be available as a less expensive fuel supply, and instead the Authority must purchase No. 2 oil in order to operate its generating units. On 100% oil, WAPA will not be operating its most efficient units to generate power. “Instead of a projected decline in the LEAC, for the first six months of 2020, the fuel surcharge must now be based on the cost of No. 2 oil which will increase the LEAC.” When the increased LEAC is added to the current base rate, residential customers will face an overall cost of approximately 57 cents per kilowatt-hour.”
The petition goes on to say that “On reconsideration, the LEAC for the period January 1 to June 30 must be based on the cost of No. 2 oil” which will increase the LEAC by approximately 20 cents per kilowatt-hour. The increase will enable WAPA to purchase diesel fuel in order to operate the two power plants continuously. “The failure to receive reconsideration of this rate will mean the Authority will be unable to purchase sufficient fuel for its generating needs.”
When asked if his position had changed about declaring a state of emergency in response to the energy crisis, Governor Bryan said, “There is no consideration of declaring a state of emergency. It would not give us any tools, or have any impact on the situation.”
Bryan argued that if a sitting governor declared a state of emergency in response to WAPA’s energy crisis, it would have zero effect on the territory’s access to new resources and would mainly serve as a tool to generate awareness in the press. “We have had several investors come to the table. And every single time someone opens their mouth to make a disparaging comment about WAPA, we start over again,” Bryan said in September.
Without increasing the LEAC, or acting on the base rate petition, the WAPA says it will not be able to supply electric power to customers in the territory on a continuous basis. This will result in power outages, also known as rolling blackouts. It would cost WAPA an estimated $200,000 a day to power each island using only diesel.