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WAPA Board Updated on Propane Project

(Saturday, November 23, 2013)

    Today at the Virgin Islands Water and Power Authority’s Governing Board meeting, Executive Director Hugo V. Hodge, Jr. addressed board members and stakeholders with an update on the status of the propane conversion project, initially named “Project Game Changer.”  The project, which entails building the infrastructure to deliver and store propane, and the conversion of WAPA’s existing GE turbines to burn propane, is expected to reduce WAPA’s fuel cost by approximately 30%, save ratepayers approximately $90 million per year, and reduce emissions of greenhouse gases by approximately 20%.  Savings to WAPA’s customers is expected to stimulate the Territory’s economy by giving consumers more money in their pockets and by unleashing capital to create jobs.

    Hodge was joined in updating the Governing Board by Richard Elliott, Onsite Project Manager with Vitol Virgin Islands Corporation. Elliott assured the governing board members that Vitol is committed to producing a quality project and assured them that the majority of the workforce, to include contractors, administrative staff and support staff, will be hired locally.  “The local component will be as high as possible,” said Elliott, “and my team will be minimal to bring people from outside the islands.”

    To date Vitol has committed approximately 54% of the project budget which is $91 million.  Hodge noted that this further demonstrates Vitol’s intention to meet their obligation to the partnership.

    Supporting assurances from Hodge and Elliott was acting board chair Juanita R. Young, who said, “The board is as firmly committed as you are with regards to reducing the cost of power and water to Virgin Islands residents. We are ratepayers just as everyone else, so it’s not only in the citizens’ best interests but ours as well to make sure we are doing whatever we can to maximize those opportunities to bring the costs down. I know the other board members feel the same way.”

    Major project updates presented by Executive Director Hodge and Elliott at today’s meeting included:

 Contracts

On July 25th WAPA signed a turnkey master agreement with Vitol Virgin Islands Corp. (Vitol) for infrastructure construction, supply, and delivery of propane at WAPA’s power plants on St. Thomas and St. Croix

  • Contracts with various subcontractors in the VI and abroad are being negotiated

Engineering

Completed the Front End Engineering & Design (FEED) Phase

  • Since the signing, WAPA and Vitol have progressed with necessary engineering, design, procurement, permitting, and safety studies to begin construction

Permitting

Made formal request to DPNR for simultaneous review of Coastal Zone Management (CZM) Major Land and Water permit applications with other project permit applications (demolition, electrical, plumbing, and building)

  • Filed Major Land and Water CZM and Army Corps permit applications for the STT and STX projects
  • Filed Letter of Intent (LOI) with U.S. Coast Guard (USCG) to transport, store, and lighter propane in territorial waters
  • Obtained U.S. EPA  Prevention of Significant Deterioration (PSD) non-applicability determination for both projects

Safety

Comprehensive Fire Risk Assessment and Hazardous Area Classifications have been conducted

  • Employee training and emergency response drills are planned with first responders
  • WAPA is evaluating and developing a comprehensive approach to overall fire protection at the plant sites
  • Firefighting systems for the facilities will be National Fire Protection Association (NFPA) compliant, including a “water blanket” that will suppress a leak or flame

Procurement

Procurement of the various project components and services needed is underway with an emphasis on long lead time items:

Loading Arms – final negotiations with vendor in progress

  • Long lead valves – negotiations with vendor ongoing
  • Propane storage tanks – fabrication has commenced
  • Contract for 7 turbine conversions – executed

    Following the meeting Executive Director Hodge issued the following statement, “As Executive Director of WAPA, I have no higher priority than reducing customer rates by diversifying our sources of supply of electricity including solar, wind, biomass and propane. WAPA’s conversion to propane is progressing according to plan and in a very short time we have reached several critical project milestones.  Significant progress has been made with the completion of the front end engineering and design of the project, as well as on the safety features, contractual negotiations, procurement and overall planning.  A management team from the project sponsor, Vitol, is now on the ground in the Virgin Islands working hand in hand with WAPA personnel to drive the project forward.  And eighteen propane storage tanks are literally under construction as we speak.”

    Board members in attendance at Thursday’s meeting were Acting 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, Cheryl Boynes-Jackson and Licensing and Consumer Affairs Commissioner Wayne Biggs.  Board Chair Atty. Gerald Groner and Donald Francois were excused. Eduardo Garcia, Vice President of Vitol Virgin Islands Corporation was also in attendance.

For additional information visit viwapa.vi or poweringvi.vi.

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