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Board Approves Environmental Project and FY2014 Budget

(Friday, May 24, 2013)


The Virgin Islands Water and Power Authority Governing Board met today on St. Thomas and approved a project which will strengthen the utility’s environmental programs and comply with the continuous emissions monitoring air permit requirements of the U.S. Environmental Protection Agency (EPA). The Board also approved the Authority’s FY2014 operating and capital budgets and received updates on the Authority’s financial status.

The Authority will award a three year contract to Rockwell Automation at a cost of $2,273,060 for the installation, certification and round-the-clock maintenance and repair of an environmental reporting system for air emissions at the Richmond and Harley power plants. The work will substantially reduce or eliminate past violations of air permits that require monitoring equipment to be operational for at least 90-95% of all operating hours, and for all monitored emission levels. This project will proactively respond to EPA’s position that such action is necessary to remedy several long standing compliance issues, the subject of ongoing litigation with the regulatory agency. Rockwell will also provide extensive training of personnel to facilitate independent long term maintenance of the monitoring system and continual environmental compliance with emission monitoring requirements

The Authority’s approved water and electric operating budgets will be effective from July 1, 2013 to June 30, 2014. According to Chief Financial Officer Julio Rhymer, Jr., the electric system is projected to have operating revenues of $343,316,778 and expenses of $343,315,719. The electric system capital budget totals $40,241,014. Water system revenues will be $41,159,079 with expenses at $36,657,896. The water system will also operate with capital grants in the amount of $7,652,154. The capital budget for the water system totals $18,579,416.

Assistant Chief Financial Officer Maurice Sebastian reported that the utility is realizing a more stable financial position. This is partly attributable to belt-tightening measures undertaken by the Authority coupled with the 90-day payment terms negotiated with fuel oil supplier Trafigura AG. The three month payment-due arrangement facilitates a better cash flow, as the existing customer billing cycles only allow for the Authority to recoup fuel costs from its customers on an average of 45-60 days.

Despite a better fiscal outlook, the Virgin Islands Government’s electric accounts receivables balance as of April 30, 2013 stands at $20,761, 115, which is $6.4 million or 45% more than the balance at the same time last year. Agencies with the largest balances as of April 30, are Juan Luis Hospital-$6.3 million; Human Services-- $1.2 million; Schneider Hospital --$2.2 million, V.I. Bureau of Corrections -- $963,067, and Department of Finance for streetlights at $7.6 million. V.I. Government water accounts receivable balances are $3,233,121 which is $1.035 million or 24% less than at April 2012. The Bureau of Corrections, Human Services and Juan Luis Hospital carry the largest water account balances.

The Governing Board also took the following action:

• approved a change order request from J. Benton Construction for the Christiansted Underground Phase II project at a cost of $131,012. The additional funds will cover the costs for changes in project design necessary where property owners refused easements, work stoppage days to accommodate several major public events in downtown Christiansted; and repairs to several unknown and unmarked underground utilities damaged during construction

• authorized two change orders to increase the contract amount by $71,972 to pay J. Benton Construction for work to install 800 linear feet of waterline in downtown Christiansted as part of the electric underground phase II project.

• authorized a contractual agreement with FTI Consulting Inc. at a cost not to exceed $732,500 for retainer and media costs to assist with a public education and community awareness effort regarding switching from fuel oil to liquefied petroleum gas (propane) as the Authority’s primary fuel source for the generation of electricity. Fifty percent of the cost will be shared by the selected LPG supplier/project developer. The agreement for a one year period beginning June 1 will require the contractor to work with both companies to educate and inform the public about the conversion to LPG as a safe, cleaner, and more economical fuel source, and to provide a variety of opportunities for customer input and feedback during the awareness and education outreach effort.

Today’s “WAPA Working for You” presenter was Gerald Hodge, Jr. First Class Maintenance Mechanic in the St. Thomas water division. Hodge was provided the opportunity to observe the governing board at work and then to explain his job responsibilities. Hodge, a 20 year WAPA veteran, distributed a power point presentation and enthusiastically related information about his work with the water purification system, pumps, the automatic standpipe, high pressure and hydraulic valves, water storage tanks and equipment repairs. He repairs and services 26 types of portable equipment used by water crews in the field and is now working on a new water distribution monitoring panel being installed at the Donoe tank. Hodge, who has received specialized training in his craft, has trained maintenance technicians on St. Croix to perform similar work. Vice Chair Juanita Young complimented Hodge on his presentation while acknowledging that he “has a lot of responsibility” as the only maintenance mechanic in St. Thomas’ water department and has demonstrated that he is very good at what he does.

During the executive director’s report, Hugo V. Hodge, Jr. took a few minutes to laud the daily work of WAPA employees in what is currently a difficult environment mainly because of high customer rates. Saying that the employees are part of an “industry where perfection is the only measure,” Hodge observed that sometimes it’s overlooked that WAPA employees are “so much more than the rates” and are working diligently to improve service reliability and cost. Reminding the board that WAPA is making plans to celebrates its 50th anniversary in 2014, he listed some significant changes in utility operations that will benefit all customers including the completion of the changeover to water purification by reverse osmosis at lower cost to customers; the conversion to propane for electric generation at a minimum of 30% savings to customers; the completion of solar power installations feeding into the grid; the collection of at least one year of wind data essential to begin the search for a wind power supplier; introduction of biofuel as a generating source; and establishing the foundation for advanced metering infrastructure which will promote greater utility and customer energy efficiency. “It will be a well-diverse system,” Hodge said, and “I will never stop giving credit to the 600 strong of WAPA,” he concluded.

Attending the Board meeting were Vice Chair Juanita R. Young, Planning Committee Chair VIEO Director Karl Knight, Secretary Noel Loftus, Planning and Natural Resources Commissioner Alicia Barnes, Consumer and Licensing Commissioner Wayne Biggs, Cheryl Boynes Jackson and Elizabeth Armstrong. Excused were board chair Atty. Gerald Groner and member Donald Francois, P.E.