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WAPA GOVERNING BOARD APPROVES LEASE FOR TEMPORARY POWER GENERATING UNIT AT EMERGENCY MEETING TODAY

(Wednesday, February 15, 2012)

WAPA GOVERNING BOARD APPROVES LEASE FOR TEMPORARY POWER GENERATING UNIT AT EMERGENCY MEETING TODAY

The Virgin Islands Water and Power Authority Governing Board held an emergency meeting today and approved a lease agreement with General Electric International, Inc., for the rental of power generation and water purification equipment, as well as the sale of associated balance of plant and services.
Executive Director Hugo V. Hodge Jr. said the rental unit from General Electric is more efficient than the Authority’s existing St. Thomas units and will provide 22 MW of power into the Randolph E. Harley Power Plant. Hodge said, “This temporary unit will require less fuel and will provide the opportunity to take other units in need of maintenance offline, making them most efficient, while saving money for our customers.”
The total cost of the lease is $14.6 million plus an estimated $1 million for transportation of the equipment. To finance the 18-month lease, the board authorized the Chairperson of the governing board and/or the Executive Director to take all necessary actions, including executing and delivering the standby letter of credit with Banco Popular de Puerto Rico. The letter of credit provides additional payment security for the term of the contract.
The board also approved the request to rescind the contract with ABB, Inc., which was awarded to perform steam turbine upgrades on Unit #10 and #11 on St. Croix. ABB was granted the contract in June of 2011, but the company did not accept the requirement of the contract to pay gross receipt taxes and obtain a V.I. Business License. General Counsel Atty. Lorelie Farrington said, “We extended them some time to see what efforts they could make to resolve their tax issues, but they eventually advised us that their contract had not included appropriate tax requirements.” The Authority will now begin negotiations with the next most responsive bidder and return to the Governing Board for final approval.
Attending today’s meeting were Board Chair Juanita Young, Board Vice-Chair Atty. Gerald Groner, Board Secretary Noel Loftus, Licensing and Consumer Affairs Commissioner Wayne Biggs, Planning and Natural Resources Commissioner Alicia Barnes and Donald Francois. Excused were Energy Office Director Karl Knight, Cheryl Boynes-Jackson and Brenda Benjamin.
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