Press Releases

Default text size Larger text size Even larger text size   print
RSS feed
< Back to Main

WAPA Governing Board Special Meeting

(Thursday, October 17, 2013)

In a special meeting called on Wednesday, October 16, 2013, the Governing Board of the Virgin Islands Water and Power Authority voted to authorize the Executive Director to execute an agreement with Vitol Virgin Islands Corp., GE International, Inc., and GE Energy Parts International LLC, which is essential to the successful conversion from fuel oil to liquefied petroleum gas (LPG) or propane.

GE will provide equipment and services necessary to convert three of the Authority’s generating units on St. Thomas and four generating units on St. Croix to enable them to burn LPG. This agreement allows WAPA to have a more direct involvement and relationship with the propane conversion process and ensures all guarantees and warrantees are passed directly to WAPA and not through a third party.  “This agreement is critical in how the project moves forward,” said WAPA Executive Director Hugo V. Hodge, Jr. “It’s important for WAPA to have access to all of the information relative to the conversion process and this amends the contract to include our involvement,” Hodge said, referring to the contract signed between WAPA and Vitol in July to switch power generation in the Territory to propane.   Hodge went on to note that this agreement does not change the financial terms of the original contract. “The structure of payment remains intact,” stressed Hodge.  Vitol will be covering the upfront cost of $100 million, to be repaid by WAPA over five years, for the construction and operation of the facilities and managing the repowering of combustion turbine units between WAPA and Vitol.

Board Chairman, Attorney Gerald Groner wanted board members to be cognizant of the fact that WAPA must have a great deal of participation in the conversion process and in particular each stage of the process.  “This finalization to the contract makes us a contract party” said Groner, “which means we have a relationship with all the parties and we can enforce all aspects of the contract. This agreement gives us a more hands on and clear legal path to monitor, supervise and call for the correction of work,” he said.  Director Hodge stressed that while Vitol continues to manage the propane project, this agreement gives WAPA another layer of oversight.

In the only other measure before the Board on Wednesday, the members authorized the Executive Director to enter into a contractual agreement with Total Resource Management (TRM) to develop and fully implement Maximo 7.5, a Computerized Maintenance Management (CMM) system, at both of the Authority’s power generating facilities at a cost of $592,606.

Maximo is the industry leading software program for maintenance management in the utility industry.  While the Authority currently utilizes an earlier version of Maximo (6.2), it had not been fully implemented due to limited financial resources. This agreement allows full implementation of the CMM. The software program will allow WAPA’s project management program to: reduce maintenance costs, improve the predictability of demand for parts and labor, and improve availability and reliability of plant assets. The program will also track the maintenance and performance history of critical assets to monitor total ownership costs, identify “bad actors,” and help select vendors with superior products and services. The Maximo agreement allows sharing and enforcement of best practices, inventory, resources and personnel. The implementation of the enhanced Maximo program is an integral part of the conversion to the use of propane as a fuel source and the integration of renewal energy to WAPA’s grid.

Board member, DPNR Commissioner Alicia Barnes reiterated the sentiments of board member Donald Francois, when she commended the Authority for being proactive and getting this Maximo program implemented.  “I commend the staff for this initiative,” said Barnes, “it is very forward thinking and it brings efficiency to the power plants.”

Both of these agreements will allow WAPA to move forward as efficiently as possible with a much-needed fuel switch that will unlock important economic and environmental benefits for the Virgin Islands and its residents. Transitioning to propane is the best near-term option to reduce the cost of fuel for power generation, lowering WAPA’s fuel costs by 30 percent and leading to savings for all WAPA customers. Not only have all environmental considerations for air, land, and water been evaluated, but air quality will be improved as switching to propane will decrease carbon emissions by about 20 percent. 

Board members in attendance were Chairman Atty. Gerald Groner, Vice Chair Juanita R. Young, Secretary Noel Loftus, Planning Committee Chair VIEO Director Karl Knight, DPNR Commissioner Alicia Barnes, DLCA Commissioner Wayne Biggs, Donald Francois, and Elizabeth Armstrong. Board member Cheryl Boynes-Jackson was excused.

###