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PSC Says WAPA's Failures Cause Uncontrolled Losses

Sept. 3, 2004 – Valencio Jackson, chairman of the V. I. Public Services Commission, and Alberto Bruno-Vega, executive director of the Water and Power Authority, have something in common – neither is inclined to pull his punches.
When Bruno-Vega announced at a press conference Thursday that WAPA was going to follow through on requesting bids for alternative energy, despite an order not to from the PSC, his comments were blistering. He said the Commission's order violated the law and the Commission was trying to usurp power.
Jackson responded with tough words as well. He said in a press release, "We are not in the position to change the world oil prices but we can and will do what we can to control the waste that has characterized the performance of WAPA in the recent years. Instead of working with us, WAPA has repeatedly delayed its compliance with Commission orders, instituted two pending lawsuits against the Commission and tried to change the results by public relation campaigns. If WAPA's management spent even a portion of the time improving WAPA's overall performance that they spend on public relations efforts the consumer would benefit greatly."
The argument between the Authority and the Commission is presently being waged with paper and Power Point presentations. However, Bruno-Vega warned that it could escalate to an expensive battle between lawyers in the courts.
Before Bruno-Vega's Power Point presentation he released a 22-page Petition for Reconsideration that the Authority was filing with the PSC. It essentially asks the Commission to drop its demands on how WAPA proceeds for soliciting bids from companies who want to supply alternative energy to WAPA. Bruno-Vega said the contract would involve "multi, multi, multi millions of dollars" and last between 15 and 20 years.
Jackson's response was two pages with the five-page order attached.
The order states: "WAPA is directed to not release any Request for Proposals for independent power production or qualifying facilities until such time as a draft RFP has been approved by the Commission."
The order allows for the Commission chairman "to appoint a hearing examiner, who shall set a procedural schedule to permit the orderly review of the proposed RFP."
According to the order WAPA could send out the request for proposals only after the commission had reviewed and approved it.
Bruno-Vega's Power Point presentation was 15 pages long. The first 12 outlined the procedure WAPA was using in the bid process. The last three blasted the PSC order. (See "WAPA Moves Ahead Without Blessing of PSC").
Bruno-Vega said, "The order exceeds the jurisdiction and authority of the PSC and encroaches and attempts to usurp the powers of WAPA's governing board to govern the affairs of the Authority."
Jackson's response does not address directly whether the Commission or the Authority has the power to make certain decisions. Instead he points out what he sees as shortcomings in WAPA's management. He said, "WAPA's history of acquiring new generating equipment has been a tragic story." He cites the purchase of power plants, Unit 22 and Unit 23 on St. Thomas as examples. He said, "Unit 22, which should be WAPA's most efficient unit, does not comply with its environmental permits, and has never run properly. On installation of the new Unit 23, Unit 22 will have to be taken off line for major repairs only four years into its life, at substantial additional cost to the ratepayers."
The PSC press release, in material that is not directly attributed to Jackson, said, "The Commission, in recent investigations, has uncovered several areas in which the ratepayers of the Virgin Islands have been burdened with unnecessary costs due to the actions, or failures to act, of WAPA. Those areas include:
– Uncontrolled losses of electricity and water,
– Failure to diversify fuel sources, and
– Failure to plan adequately.
"WAPA has for many years suffered 'line losses' – that is electricity and water which are produced but for which WAPA is never paid – that are far out of line with normal utility operations. These are losses that can and should be controlled by WAPA, Commission technical advisers report."
Jackson concluded, "The Public Services Commission takes its responsibility to assure that reliable power at reasonable and prudent costs is provided to the rate-paying citizens of the Virgin Islands very seriously. The Commission regrets the unfortunate actions and approach of the Water and Power Authority, and again invites the Authority to work cooperatively with the Commission to provide reliable power to the ratepayers of the Virgin Islands at reasonable rates."
Bruno-Vega also emphasized in his presentation that the interests of ratepayers were foremost. He also emphasized that the bidding process would be "transparent" so the public would know at all times what was going on.
Although Bruno-Vega did not mention any specific potential energy providers in his presentation, Jackson did.
Jackson said, "The V. I. Code has a procedure where small power producers with excess power to sell are entitled to tie into the power grid and have that power utilized so it docs not go to waste."
He continued that the Commission had approved requests from two "Qualifying Facility" applicants — Caribe Waste Technology and Caribbean Energy Resources — and has recently received, an amended application for "Qualifying Facility" certification from St. Croix Renaissance.
He asserted that the Authority has not only refused to respond to proposals from any of the approved providers but also that "WAPA has also been sued by at least one of its proposed power producers, Caribe Waste Technology for WAPA's conduct. That suit contains numerous allegations of improper conduct."
Bruno-Vega responded in a phone interview Friday night, "We have invited them all to apply." He said WAPA does not want to be forced into individual negotiations with any firms.
He also responded to the Jackson's charges of "uncontrolled losses of electricity and water." Bruno-Vega said, "We realize we have some losses. We are fighting that head-on." He said he submitted a detailed plan in June to the PSC on how those problems could be addressed.
As far as the charges Jackson made about Unit 22 on St. Thomas, Bruno-Vega said he was not working with WAPA when that purchase was made and knew little about it.
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