WAPA HOPEFUL THINGS ARE GETTING BETTER

The Virgin Islands Water and Power Authority Governing Board discussed its current financial position at its regular meeting on Thursday and felt somewhat hopeful that recent events would help to lessen its financial burden. With the passing of Bill 27-0221 by the Legislature of the Virgin Islands last Friday WAPA stands to gain $17.5 million to pay down on past due bills of the central government and semi-autonomous agencies. Board members expressed cautious optimism that some of the stakeholders including the Governor, the Legislature and the Public Services Commission (PSC) are operating as a team to help WAPA meet the impact of the continuing energy crisis.

Executive Director Hugo Hodge, Jr. said that the passing of the bill and the PSC’s recent approval of an increase in the Levelized Energy Adjustment Clause or LEAC factor of 19% effective September 1 will help to meet the Authority’s current need but does not address the unrecovered fuel costs from customers of $38 million nor does it totally pay down WAPA’s past due debt to HOVENSA currently at $32 million. Board Chair, Juanita Young said “we must be mindful that we have a long way to go.”

Maurice Sebastien, WAPA’s Assistant Chief Financial Officer, presented the Authority’s financial position to the Board, which “is still in the negative,” he said. However, in spite of the Authority’s negative financial position, the utility was able to close its fiscal year on June 30th with debt service coverage of 1.62 on the Electric System and 1.29 on the Water System. WAPA’s bond covenant demands debt service coverage of 1.25 for both the Electric and Water Systems.

Hodge also reported that WAPA was awarded a grant by the Department of Interior in the amount of $981,000 for the installation of a Reverse Osmosis (R/O) plant in the Coral Bay area of St. John. To help to further meet the Authority’s water production and storage needs, the Board authorized the Executive Director to negotiate and enter into a an agreement with Seven Seas, Inc. for the installation of a Reverse Osmosis Plant on St. Croix that will assist in increased water production and storage on that island. The unit will operate while water desalination units in the Richmond Plant undergo major overhauls over the next 18 months. The cost of water per thousand gallons to customers is expected to go down while the R/O units are in place. WAPA is presently reviewing the feasibility of permanently replacing its desalination units with R/O plants.

The Board also approved the following during Thursday’s meeting:

• The release of the Power Supply Study of WAPA’s generation system recently completed by RW Beck, an internationally recognized engineering consultant firm. The study updates the Condition Assessment Study completed several years ago and WAPA will use it as a planning tool as it sets is strategic plan for the next 5-20 years. This document will be available on WAPA’s website within a week for the general public’s perusal.

● $2,238,500 to GEC, LLC for Phase I of the Christiansted Underground Feeder Civil Work Project

• The construction of additional relay panels to KEMCO Industries, LLC for the Double Bus Double Breaker Switchgear project at the Randolph Harley Substation at a cost of $274,036.

• The purchase of repair parts for the Circulating Seawater Pump (A) in the Richmond Plant in the amount of $218,085 to Engineering Parts & Service, Inc

• A supplement to the Purchase Order to Sulzer Hickham for the sum of $41,200 for a total cost of $350,258 to repair, recondition and return the major components of Unit #16 Gas Turbine in the Richmond Plant.

• Authorized the Executive Director to purchase vehicles for St. John for a total of $343,795

• Approved purchase of a generator rotor from Sulzer Hickham, Inc. with an exchange of WAPA’s unit 12 generator rotor in the Harley Power Plant for $325,000

• Contract with GECLLC in the amount of $2.8 million for the 24-inch Water Line Rehabilitation Project for St. Thomas

• Authorized the Executive Director to enter into a contract with Elite Security to provide Security Services for the island of St. Croix for the period of September 1, 2008 to June 30, 2009 at a cost of $354,292.

In attendance were Young, Noel Loftus-Secretary and Finance and Audit Committee Chair, Atty. Gerald Groner—Planning Committee Chair, Commissioner of Sports and Recreation St. Clair Williams, V.I. Personnel Director Kenneth Hermon, Jr., Donald Francois. Excused were Brenda Benjamin, Vice Chair, Department of Planning and Natural Resources Commissioner Robert Mathes and Cheryl Boynes-Jackson.