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WAPA Board Approves Agreement with Vitol

(Sunday, July 28, 2013)

WAPA Board Approves Agreement with Vitol to Supply Propane for Power Generation

The Virgin Islands Water and Power Authority Governing Board on Thursday voted unanimously to approve a 5-7 year agreement between WAPA and the Vitol Group, a leading global energy provider, to supply propane for power generation in the Territory. The project, which will be completed by fall 2014, reduces the Authority’s fuel costs by 30% thereby ensuring a significant savings to WAPA customers.

Board members expressed their pleasure with the direction in which this agreement will lead the Authority and the Territory in terms of power generation. “I hope the ratepayers realize how much of a game changer this is for themselves and for the Virgin Islands,” said Acting Board Chair Juanita Young. She commended Executive Director Hugo Hodge, Jr., his staff, and the experts selected for this project. “I was amazed,” she continued, “at how thorough the entire team has been to ensure this project got to this point.”

“This is a groundbreaking effort,” said board member and VI Energy Office Director Karl Knight, “and I am excited because I realize the rest of the Caribbean is grappling with the same issue. We realized something had to be done quickly and this was done with due diligence. A great rate of reduction is expected and I am looking forward to hearing the comments on this project from the neighboring islands,” Knight concluded. Knight offered the motion to authorize the agreement which was unanimously approved by the board members.

As the vice chairman of CARILEC, the consortium of Caribbean electric utilities, Hodge knows through his meetings with other regional utility directors just how much they too are suffering with volatile fuel oil rates. With the implementation of this project, Hodge said the Virgin Islands will become a model for the region. “The rest of the Caribbean is looking at us and this project intensely to see how our model can be used in their areas and throughout the region,” Hodge said, “this project will give them an indication of how their islands will survive when the cost of fuel oil continues to be high.” He noted that this is yet another example of how the Virgin Islands and WAPA are leading the region, adding that WAPA engineers are also recognized throughout the Caribbean for their knowledge and expertise.

During Thursday’s meeting, the board unanimously re-elected its current officers for another one term: Attorney Gerald Groner as Chairman, Juanita R. Young as Vice Chairwoman and Noel Loftus as Secretary. The Authority has a nine-member board of private and public sector members and consists of engineers, business owners, energy and environmental experts, financial professionals, an attorney, and several commissioners.

The Board also took the following action:

• Authorized the Executive Director to increase the contract time with Bryan’s Electrical Contracting Corp. by an additional 60 calendar days to carry out additional work related to the Market Square Underground Utility Project
• Approved an extension of time to contract SC-27-09 with Ashland Hercules Water Technologies from July 31, 2013 to January 31, 2014, to complete the assessment of chemical purification supply requirements once decommissioning of the thermal water desalination units is completed
• Authorized the Executive Director to allocate $129,000 of the 2010 Revenue Bonds to St. Croix’s Midland Substation facility which will support a 64kV transmission system to facilitate the interconnection of independent power producers and help to reduce electrical line loss
• Authorized the Executive Director to enter into a contract with Boynes Trucking System for fiscal year 2014, to provide vehicle fuel to the Authority for its vehicles on St. Croix for an amount not to exceed $401,775 and on St. Thomas for an amount not to exceed $325,175. The agreement also stipulates that as a backup, Chitolie Trucking Services in combination with HOVENSA will be used to supply the fuels for St. Croix, and Total will be used to supply the fuels for St. Thomas.
• Ratified two purchase orders that allowed the Authority to fuel vehicles until the end of the fiscal year, and until the agreement with Boynes could be completed.
o Total Petroleum for St. Thomas/St. John and to HOVENSA for St. Croix to purchase fuel for the period May 6, 2013 through June 30, 2013, not to exceed $212,164.25.
o Total Petroleum for St. Thomas/St. John and HOVENSA for St. Croix to purchase fuel for the month of July, 2013 in the amount not to exceed $80,000.
• Approved the payment of the assessments imposed by the Public Services Commission, in the amount of $375,000 to pay for work undertaken by PSC consultants and legal counsel on dockets associated with the fuel surcharge (LEAC) and electric and water base rate reviews.
• Approved the payment of monies received from the federal government in the amount of $423,102.32 to be paid to the Virgin Islands government to reduce the amount due to VITEMA to $4,142,493 for non-reimbursable expenditures associated with Hurricane Hugo.
• Authorized the Executive Director to award a purchase order to Electric Supply of Tampa for purchase and expeditious delivery of underground material and equipment for the Frenchman’s Bay road project at a cost of $612,885.

Board members in attendance at Thursday’s meeting were Vice Chair and Finance Committee Chair Juanita R. Young, Secretary Noel Loftus, Planning and Economic Committee Chair V.I. Energy Office Director Karl Knight, Planning and Natural Resources Commissioner Alicia Barnes, Elizabeth Armstrong, Donald Francois, Cheryl Boynes Jackson and Licensing and Consumer Commissioner Wayne Biggs. Board Chair Atty. Gerald Groner was absent but voted by proxy.