June 29, 2001 – Facing questions as to whether measures approved at a previous meeting of the Public Services Commission were binding since the action was taken without a quorum present, the commission on Friday unanimously reapproved the hiring of AUS Consultants to do investigative work for the PSC.
On May 8, the three commission members present voted to appoint AUS Consultants to conduct rate investigations of Innovative Telephone and the Water and Power Authority. The commission by law has seven voting members, making four a quorum. Commission member Desmond Maynard had been present at the start of that meeting but stormed out shortly after it began, in protest of hiring of AUS.
Walter Challenger, commission chair, called for a revote at the start of Friday's meeting, because "the matters created an assumption of illegality."
He and fellow PSC members Patrick Williams, Alecia Wells and Luther Renee voted unanimously to approve AUS, which according to Challenger has already begun working for the commission.
But, Challenger said, because AUS has been working "ad hoc" with no contract, no information is available as to the work it has been asked to do, the work it has completed or how much it is costing the commission.
Renee expressed concern that little information was available to commission members on the background of the firm, the work it has been contracted to do and the price tag therefor. "We need to have some written documents as to the terms," he said. "What they will be doing for us, I don't know."
Renee said he had no objection to hiring AUS as a consultant but was bothered that the company was brought in by "one member" of the PSC and was being used as the commission's permanent and sole consultant without commission members having received any information about the firm.
"I have nothing against AUS," Renee said. "I have serious concerns with the way things are done. It looks as though AUS is the permanent consultant for this commission. What I am against is one person on the commission choosing the consultant."
Challenger said the commissioners had agreed to hire AUS and took exception to Renee's comments about one member — understood to be himself — having brought AUS on board. Challenger said the commission has voted twice to use AUS as a consultant.
It approved hiring the consulting firm to investigate whether the PSC should grant a request from Wireless World that the commission require Innovative Telephone to allow Wireless World to interconnect with Innovative's local lines. Under federal deregulation laws, Wireless World is seeking to provide local telephone service in direct competition with Innovative, which to date has a monopoly on local service. Wireless World and Innovative each will be assessed $50,000 to cover costs incurred by the PSC in hiring the consultant and holding hearings on the matter.
Also on Friday, the PSC received a request from Joseph Thomas, executive director of the Water and Power Authority, for a an increase in the fuel component of the base rate of electric bills, to $0.5 per kilowatt hour from the current $.0425. He said the increase is needed to keep the financially troubled utility afloat.
The price of oil is dropping slightly on world markets, Thomas said, and increasing the fuel component rate, while at the same holding the "levelized energy adjustment" rate at its current level will allow WAPA to keep its revenue from the surcharges constant. He said WAPA needs to maintain its revenue because it is behind in its payments to Hovensa, its oil supplier.
Thomas said customers would not see an increase in their electric bill unless the price of oil skyrockets. "The customer's bill should look the same or less, unless there is a large increase in the price of oil," he said. "It is technically a rate adjustment, but there will be no increase in what the customer will pay."
The PSC voted to defer action on the request until a rate investigation is completed. AUS Consultants also has been designated to investigate WAPA cases.
Thomas also told the commission that WAPA is in dire financial straits and that its financial picture will improve only if the V.I. government pays the more than $25 million that it owes in past-due electric bills.
"The utility has the framework for a strong financial foundation," he said, but the huge government debt is drastically impacting its financial stability. "Every time we go to the bond market, every time we go to get a letter of credit, were going to be paying more than we should," because of the debt, he told the commission.
If WAPA did not press the government to pay the millions owed and did nothing to force the issue, the utility could be in deep financial trouble soon after July 15, Thomas said. "Our concerns about the financial stability of WAPA are real," he said. "We are not crying wolf. We could be insolvent within days," he said.
Thomas and Gov. Charles W. Turnbull are to meet on July 10 to discuss payment of the government's water and power bills. Even if the Legislature approves a special appropriation requested by the governor to pay utility bills, Thomas said, a payment plan for the outstanding balance must still be worked out. Turnbull asked earlier this week for the Senate to approve $15 million "to fund prior year obligations inclusive of past due utility bills." At Thursday's special session, the majority voted to send that and most of the governor's other appropriation requests to the Finance Committee for hearings.
Thomas told the PSC of a telephone call he received from a woman with a young child. She had not paid her WAPA bill in the mandatory 30 days, and her electricity had been cut off, leaving her with an infant in the dark, he said. The woman was "hysterical," he said, and her call pointed up the inequity of how WAPA deals with the government and the residents of the Virgin Islands. He said he didn't know how much the woman owed, but he knew "it was nowhere near" what the government owes.
In other action, the PSC voted to approve interconnection between Vitel Cellular and Innovative Telephone. It was able to do so legally only because Innovative allowed the PSC extra time to consider the request, Challenger said.
When a utility files a petition with the PSC, the commission has a time limit for responding. If the commission does not respond within that time frame, the petition becomes law and the PSC loses jurisdiction over the matter, Challenger said.
He expressed concern that future requests before the PSC may not be completed before deadlines set by the V.I. code.
"Legally, we would have lost jurisdiction on this matter," he said of the Vitel Cellular/Innovative case. "They extended time to us on three separate occasions." The request was approved unanimously.
The PSC currently has six voting members. Maynard and Dora Hill were absent Friday. One St. Croix seat is vacant. Appointments have not been made in the 24th Legislature for two senators to serve as non-voting members.
