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WAPA BOARD AUTHORIZES EXECUTIVE DIRECTOR TO PROCEED WITH DISCUSSIONS WITH LPG AND LNG SHORT-LISTED COMPANIES

(Thursday, December 20, 2012)

The Virgin Islands Water and Power Authority Governing Board held its monthly meeting on St. Croix today and authorized Executive Director Hugo V. Hodge, Jr. to move forward with clarification discussions with the seven short-listed companies that responded to the Liquid Petroleum Gas (LPG or propane) and Liquid Natural Gas Request for Qualifications (RFQ) issued in October.

On November 9, WAPA received responses from five companies for LPG/propane infrastructure and supply and eight companies for LNG/liquefied natural gas infrastructure and supply. Since then, the Authority has completed its evaluation of the responses to both the LPG/propane and LNG RFQs and has recommended the following companies for follow-up discussions: LPG -- VITOL, Trafigura and Geogas/Polaris Consortium and LNG -- Pacific Rubiales Energy, Gasfin, Cheniere and LNG Enterprises.

Hodge said it was good news to have 13 companies respond to the RFQ and even better news to have companies of this caliber respond. “This is a great step in moving forward and getting rid of our dependency on fuel oil and taking a blow to the high price of energy we have in the territory,” said Hodge. Hodge plans to begin discussions with the short-listed companies in early to mid-January, during which the Authority will request formal proposals from each company. He said the evaluation committee will engage in parallel negotiations to provide a fast-track in getting the needed information from the companies.

“This is a whole new technology, a whole new system of delivery and a whole new industry,” said Board Chair Gerald Groner. “This is a complex puzzle with many moving pieces and it’s a very serious significant step for the territory.”

Hodge also explained that the Authority is looking at propane gas as an interim solution should the acquisition of propane be more feasible while the federal government works out the guidelines for the wholesale export of LNG within the United States. Hodge said he’s looking forward to finalizing the deals and bringing relief to customers as soon as possible. The Authority will continue to update the public as the negotiations proceed. 

Board members also authorized a contract with Tantalus/Itron in the amount of $9.9 million to provide WAPA with a system that permits Advanced Metering Infrastructure (AMI) of all the Authority’s electric meters territory-wide. AMI is not a single technology, but rather an integration of many technologies that provides an intelligent connection between consumers and their utility. This project is an integral part of addressing the utility’s challenges in improving its overall operational efficiency, reducing energy theft, improving the billing process and reducing line loss with the use of new meters and accurate meter reads. It will also implement the necessary infrastructure for future applications such as pre-pay services, home automation and energy saving programs. The contract also includes trainings for WAPA personnel on the new system. In response to board members inquiries, Hodge said that after moving to automated meter reading, WAPA will retain the existing meter readers and move them into other departments such as Meter Services. 

Other approved projects include:

  • A secured loan agreement with Rural Utilities Services (RUS) to finance the Automated Meter Infrastructure project in the amount of $13.2 million. In light of the Authority’s current cash constraints, a secured loan with RUS will allow WAPA to finance the AMI project at a low interest rate.
  • Revisions to Article XIX, XXI and XXIII of the Governing Board Bylaws to remove the position of Assistant Executive Director/CFO and replace with the position of CFO.  Further, the position of Assistant Executive Director for the St. Thomas/St. John District would be removed.  The final change would revise the Bylaws to allow that if the Executive Director is off island or unavailable, the Executive Director may select from any Officer of the Authority or the Director of Transmission and Distribution, to serve in his absence. The changes are necessary to comport with the current management structure.
  • An upgrade of the Richmond Power Plant infrastructure to accommodate the Seven Seas Water purchase agreement. Those upgrades include additional improvements to the Intake Pit to assure reliable plant operations. The Authority must also purchase new motors, VFD’s, electrical feed and spare parts. This amounts to $900,000.
  • A change order #2 to extend the contractual end date by 60 working days for the rehabilitation of the Richmond Tank Civil Work: Drainage Project, contracted to Zenon Construction.  This project is funded by the Environmental Protection Agency’s Drinking Water Infrastructure Safety Act fund. The new contractual end date will be April 8, 2013.
  • A change order #3 for the Whim Waterline Rehabilitation project contracted to Virgin Islands Paving, Inc. to access $22,251.09 of the contingency funds to install additional paving, and for a project time increase of 120 working days from November 30, 2012.
  • Two-year contract with Hawkins Delafield and Wood for professional consulting services and bond counsel for the Authority at the cost of $430,000.
  • A contract with Evertec, Inc. in an amount not to exceed $350,000 to convert the entire paper history of WAPA to a digital system. This system will have the ability to capture, store and retrieve documents, as well as provide full text searching of stored documents, while saving the Authority financially.

In the WAPA Working for You segment, which familiarizes the board with the role of WAPA employees and lets those employees see how the board functions, Property and Office Supervisor Lina Joseph outlined her duties. They include overseeing the purchase of most of the Authority’s office supplies, managing the St. Croix office messenger and janitors, as well as   acting as a petty cash custodian. Joseph said every day at the Authority is different, “I could have my day planned, then something unexpected like a water leak or a problem with the plumbing would occur,” said Joseph. “I always have to be flexible to handle the responsibilities of this position.”

During the meeting, Groner congratulated Assistant Executive Director Glenn Rothgeb on his retirement this month and thanked him for his 35 years of service to WAPA and the U.S. Virgin Islands.

Attending today’s meeting were Groner, Board Vice-Chair Juanita Young, Board Secretary Noel Loftus, Licensing and Consumer Affairs Commissioner Wayne Biggs, Energy Office Director Karl Knight, Donald Francois and Cheryl Boynes-Jackson. Planning and Natural Resources Commissioner Alicia Barnes and Brenda Benjamin were excused.

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