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HomeNewsArchivesIt's 'Full Steam Ahead' for WAPA's Waste Heat Boiler Project

It's 'Full Steam Ahead' for WAPA's Waste Heat Boiler Project

May 10, 2007 — During a special session Thursday of the V.I. Water and Power Authority's governing board, the board voted unanimously to authorize management to proceed with the issuance of $97 million in bonds. The bonds will be used to finance a waste heat recovery boiler on St. Croix and other capital improvements.
Alberto Bruno-Vega, WAPA executive director, told board members, "There is a sense of urgency due to reliability and an economic issue to move on the acceptance of the bond financing plan. The order has been placed with the manufacturer, and they are ready to ship in November. There should be $10 million annually in savings seen with 82 percent passed on to the customer."
WAPA's chief financial officer, Nellon Bowry, presented the bond financing plan. Bowry said, "Finding the money to finance the boiler is the most important mission. We are talking about significant cost savings passed on to the customer. Urgency can't be overstressed."
Bowry explained to board members that a critical part of the financing plan was the recent Public Services Commission approval of a future customer surcharge to provide the money needed to pay for the waste heat recovery boiler. The surcharge will be effective with the operational date of the new unit, estimated to be October 2008.
The surcharge will be an increase of $1.10 per month for a residential customer using 500 kilowatts. The increase on the billing will be offset by a $6.36 decrease due to savings from the new equipment.
Jim Haddon, managing director of Citigroup Global Markets, gave a summary plan of finance for the 2007 bonds, where WAPA proposes financing of re-funding and new money components. Haddon said, "WAPA needs to take advantage of rates and get into the market quickly. The authority is proud of the triple-B rating it has. Senior management has built good will with the [bond] rating agencies, and they have a constant dialogue with them." Those agencies are Fitch, Standard & Poor's, and Moody's.
Bruno-Vega went on to say, "There won't be additional power, but what we get is savings. We will shut down inefficient boilers and replace them with the waste heat recovery boiler."
With the increased efficiency of the new unit, WAPA will use less oil.
The boiler, to be located at the Richmond plant, will collect waste exhaust from two existing gas turbines and generate steam electricity.
Improvements will also be made at the Long Bay and R. Harley substations on St. Thomas.
Board members will closely review the specifics of the plan and give final approval at the next scheduled meeting set for May 17.
Board members in attendance were Cheryl Boynes-Jackson, Alphonso Franklin, Noel Loftus, Robert Mathes, and Juanita Young.
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