WAPA, Defying PSC, Will Initatiate Base Rate Increase Wednesday

On Tuesday afternoon, the Virgin Islands Water and Power Authority — on the heels of a thorough rebuke of WAPA’s actions over the years, written by Public Services Commissioner Executive Director Donald Cole — filed for a reconsideration of the Public Services Commission decision of January 26, which rescinded an interim base rate increase the commission had approved just two weeks earlier, WAPA made known via press release late Tuesday.

WAPA said today that by filing for the reconsideration of the rescinded interim base rate, it was lawfully authorized to implement the rate adjustments on February 1.

In the filing, WAPA said that the PSC action was taken without notice to the authority. Additionally, WAPA added, the commission members did not discuss or provide any explanation for their actions. WAPA says it is clear from the record that the sole reason the PSC rescinded the rates was in retaliation for WAPA’s exercise of its statutory right to seek reconsideration of an order approved by the commission in December 2016.

The water and power company said it sought the reconsideration of a number of provisions in the LEAC order, where WAPA believes the PSC exceeded its authority. WAPA contends that the PSC’s action in rescinding the interim base rate on January 26th was both arbitrary and capricious, and most importantly, not supported by law. The law requires WAPA be provided ten days’ notice concerning any commission action, according to the release.

Contention among PSC commissioners and WAPA during Thursday’s meeting led to the surprise decision, one that USVI residents — many struggling to make ends meet and whose power bills were promised a 30 percent reduction following the implementation of WAPA’s propane project — welcomed. The dissent arose from one of WAPA’s items for consideration at the PSC meeting — which was ultimately denied — relative to a consulting firm hired by the PSC to evaluate whether WAPA had taken action on recommendations resulting from a 2014 management audit of the power and water company. The firm, Vantage Energy, was hired by WAPA to perform the audit, and WAPA saw the PSC’s hiring of the same firm for the evaluation as a conflict of interest.

WAPA Executive Director Julio A. Rhymer, Sr.

“Due to the potential impact on the territory, and after consideration of the substantial and irreparable financial harm that would be inflicted on the authority due to the unlawful action taken by the PSC, WAPA has made the difficult decision to implement the interim base rate increase, effective February 1, 2017,” said WAPA Executive Director Julio A. Rhymer, Sr. “The rate increase was approved by the PSC on January 12th.”

Mr. Rhymer said the $14.5 million generated by the interim rates is vital to the authority’s power plants becoming more efficient and reliable. With new generators, there is also significant fuel savings to customers in the short term and into the foreseeable future. The interim base rate adjustment, which represents an overall increase will allow the WAPA to continue meeting its mandate of providing electrical and potable water service to the people of the Virgin Islands, according to the release.

In his statement on WAPA, Mr. Cole said the company’s inefficiency had cost rate payers hundreds of millions in preventable fuel charges. He also said WAPA’s recent warning of rotating power outages was sham.

Once the base rate increase takes effect on Wednesday, customers consuming about 400 kwh monthly and currently paying $121.95, will see their power bills increase to $138.16, an additional amount of $16.21, or 13.3 percent. Commercial customers consuming about 1,200 kwh monthly, will see their power bills go from $393.88 to $472.52 under WAPA’s proposed base rate increase — a difference of $78.64, or 20 percent increase. And large power users (with 75 percent load factor), consuming about 20,000 kwh, will see their bills go up from $5,827.00 to $6,942.98 — an increase of 19.2 percent.

“WAPA’s decision to file for the reconsideration of the PSC action came after much consideration,” said Mr. Rhymer, according to the release. “It is necessary to prevent or at least delay the catastrophic and long-lasting ill effects of the PSC’s vote on not only WAPA but, to a greater extent, on the community who rightfully expects basic electric and potable water service.”

WAPA’s decision to defy the PSC will anger residents whose bills will be higher at the end of February. St. Croix residents took to the streets near WAPA’s office in the Sunny Isle Annex earlier this month in protest of the increases, complaining that the water and power company had effectively deceived its customers when it promised additional reduction in power bills of 30 percent as a result of the propane conversion project implementation. But instead of reductions, WAPA requested a base rate increase from the PSC, with the ultimate burden bearer being residents and businesses across the territory.

There’s been little word from 32nd Legislature senators on the matter, bar Sen. Alicia Hansen, who proposed a measure that would have blocked WAPA from raising utility rates above 3.5 percent without the consent of the Senate. But it was unlikely that senators would get behind Mrs. Hansen’s proposal and, with February 1 mere hours away, the measure is now of no effect.