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PSC, WAPA OFFICIALS TRADE ACCUSATIONS

Aug. 28, 2003 – The battle of wills between the Water and Power Authority and the Public Services Commission intensified late this week with charges and countercharges from the two entities' top officials.
On Thursday, PSC chair Valencio Jackson issued a statement accusing WAPA of inefficiency and poor judgment. He said that the utility's "past and continuing failures and actions which have cost ratepayers dearly" forced the commission to order the utility to hold off on buying a $17.5 million generating unit.
Jackson further stated that despite statements to the contrary by Alberto Bruno-Vega, WAPA executive director, and other utility officials, "any present shortage in generating capacity at WAPA on St. Thomas is neither a surprise nor an emergency. It is the direct result of past and present mistakes by WAPA over at least the last eight years." (For Jackson's full statement, see "PSC chair says WAPA must justify unit purchase" in the Source Op-ed section.)
Bruno-Vega responded immediately to Jackson's charges. "Apparently the Georgetown Consulting Group is running the PSC," he said on Thursday afternoon, a reference to the mainland firm contracted by the commission to investigate the utility's rates. "These are highly technical questions" that the PSC brings up, he said, and for the answers, "they are depending almost entirely on the consultants."
Jackson accused WAPA of failing to follow a PSC directive issued after the commission approved a record $75 million bond issue. The directive was that WAPA "seek and receive approval" from the commission "of the justification and selection of the final designs of the new generating projects to be financed with bond funds."
WAPA wants to purchase the $17.5 million General Electric "frame six" generator immediately. But on Aug. 12 the PSC ordered the utility to "take no further steps to commit to the purchase of a new generating unit for St. Thomas."
Rate hike approval contingent on controls
When the PSC in April approved a 9.6 percent electric rate increase to back what was expected to be a $70 million bond issue, it was with the condition that the commission would exercise an unprecedented level of control over how the money was spent. (See "WAPA, PSC at odds over decision-making power".)
On Aug. 21 the WAPA board ordered Bruno-Vega to file a brief in Territorial Court seeking to have the court determine the authority of the PSC regarding this order and affirm WAPA's right to conduct its affairs and to proceed with arrangements for the purchase of the generator.
Jackson's reaction was his lengthy statement raising questions about the earlier purchase of another costly generator unit that has never worked.
He said it has become clear that WAPA is ignoring the PSC directive "and is seeking to purchase a generating unit, apparently relying for justification on a 1995 study which WAPA itself rejected when it purchased the ill-fated Unit 22 instead in 1999." Jackson said the PSC has repeatedly asked WAPA for its justification of the GE unit purchase.
Bruno-Vega, however, said of Jackson that "apparently he has some information wrong." He said the PSC must not have seen two separate sets of documents from WAPA, delivered on Aug. 12 and Wednesday, respectively.
On Aug. 12, Bruno-Vega said, "We sent the PSC two binders specifying in detail all the designs for the units which prove that we are purchasing a frame six unit. Apparently, there is some internal communication problem within the PSC. Those documents are in their possession. They were hand-delivered."
And on Wednesday, he said, WAPA submitted to the regulatory commission a revised version of a 1999 study by the utility's consultants, R.W. Beck. Apparently Jackson had not seen before he issued his statement, he said.
Jackson also said in the statement: "Because WAPA needs to generate water as well as electricity, and not all of the current generating capacity is capable of driving the water-makers, all ratepayers pay extra fuel charges due to deliberate inefficient use."
Admitted inefficiency, but for a reason
Bruno-Vega said Jackson is aware of the problem WAPA faces with water production and of WAPA's own admission that it doesn't generate electricity efficiently. But he said he didn't understand Jackson's reference to "deliberate inefficiency."
"Apparently, he does not understand very well" how WAPA operates, Bruno-Vega said. "When demand is high in the daytime, we have several units operating at maximum capacity, which is when they operate most efficiently." But at night, he said, "we are forced to operate inefficiently to produce water."
If WAPA were strictly an electric utility, he said, there would be no problem. "We would shut down at night. But because of the responsibility for producing water, we can't."
At night, he said, "the demand goes significantly lower, and that means we have to shut certain units down." But "there are certain units we cannot shut down because we still need them to continue to produce steam for desalination of water … We know it is inefficient, but there is no way around it."
According to Bruno-Vega, WAPA has complied with what the PSC approved.
He was sharply critical of Georgetown Consulting Group. "The more they get involved, the more they get paid, by the hour every hour, which costs the ratepayers thousands and thousands," he said.
It's a "double-whammy" for WAPA, he said: The utility must pay the PSC assessment for rate investigations plus the cost of evaluations by its own consultants.

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