WAPA Holds Annual Governing Board Meeting

Despite the continued challenges facing the Virgin Islands Water & Power Authority, new possibilities for economic relief may be in sight. WAPA’s Executive Director, Hugo Hodge, Jr, reported to the Board during its annual governing board meeting Thursday, that he and several senior staff members met with executives of the Puerto Rico Electric Power Authority (PREPA) last week and talked about purchasing power at a price that would bring some relief to the high fuel costs that WAPA customers endure monthly.

Hodge said that a partnership with PREPA could prove to be very advantageous for WAPA. PREPA is about to embark on producing power with natural gas and this energy source could be transported to St. Thomas from Culebra via a submarine cable. WAPA would convert its present gas turbines which burn diesel fuel to accept natural gas at a significant cost savings to WAPA and its consumers. WAPA would also be able to benefit from PREPA’s well defined training program for line and plant personnel in this anticipated partnership. This would definitely present a real alternative to the present high electric and water bills, Hodge told the Board. . Teams will be assembled at both utilities to further explore this real possibility and a follow up meeting will be held in early August, Hodge reported.

Maurice Sebastien, Acting Chief Financial Officer, presented the fiscal year 2009 budget which is effective July 1. Sebastien explained that the budget revealed cash shortfalls due to the simple most influential challenge of high fuel costs and the inability of the utility to recover costs through the customer fuel charge also known as the LEAC (levelized energy adjustment clause) factor. WAPA has embarked on budget tightening measures to support the very strigent operations and capital budgets for fiscal year 2009.

The Board approved the following during Thursday’s meeting:

• $208,000 to Foster Wheeler VI to provide Labor Services and other direct costs for the repair of the super heater section of Unit #13 tin the Randolph Harley Power Plant.

• Authorized the Executive Director to negotiate and enter into a formal agreement with Bison Electric, Inc and Sumter Utilities, Inc to assist the Authority with emergency restoration services in the aftermath of a hurricane or other natural disasters

• The adoption of the Water System Strategic Business Plan as a planning tool to ensure a financially viable and sustainable water system as recommended by Public Resources Management Group.

• Adoption of the 2009 Electric Operating Budget with total operating revenues at $344,267, 000 and total operating expenses at $336,018,000 for a net loss of $(2,072, 000)

Water Systems operating budget with a total operating revenue of $47,205,000 and total operating expenses of $45,997,000 with a net loss of $(308,395)

The Electric Capital Budget was approved in the amount of $50,741,000 and the water capital budget in the amount of $14,623,000.

• Resolution to authorize the Executive Director, Assistant Executive Director (STT), Chief Financial Officer and Assistant Chief Financial Officer to act on behalf of the Virgin Islands Water & Power Authority with respect to the disposition of bond proceeds held by the Bank of New York Mellon as Trustee and Custodian.

• Modification to the bylaws of the Governing Board with reference to emergency meetings to include attendance at meetings via the Authority’s telephone conference or videoconferencing system located at either Executive Office of the Authority.

New Board Officers

The Governing elected new officers for the fiscal year 2009 as follows: Juanita Young; replaces Cheryl Boynes- Jackson as Chairperson, Brenda Benjamin replaces Alphonso Franklin recently retired from the Board as Vice Chairperson, and Noel Loftus replaces Juanita Young as Secretary. Boynes-Jackson expressed her appreciation for the five years she spent as a Board member and the year she served as Chairperson. “It was truly an educational experience, especially transitioning from the average customer to a Board member,” Boynes Jackson said. “I am proud to have been involved in the hiring of WAPA’s new executive director and the progress we have made towards the diversification of WAPA’s generation portfolio with the coming incorporation of alternative and/or renewable energy into our operations,.” Boynes concluded.