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WAPA Nixes Hospital's Temporary Power Contract

Feb. 1, 2008 — The Governing Board of the Virgin Islands Water and Power Authority rejected a request from Juan F. Luis Hospital to allow its contractor to obtain a temporary electric power installation at their regular meeting on St. Croix Thursday.
Lang’s Electric and Mechanical Systems, the electrical subcontractor for primary contractor, Roy’s Construction, Inc., wants to power a large new transformer on the hospital’s property. Gregory Calliste, the hospital’s chief executive officer, sent a letter supporting the request. But WAPA board members viewed the request as an apparent attempt to circumvent WAPA's decision to not allow any new service contracts at the hospital until it honors a 2003 agreement it signed to pay for utility bills from as far back as eight years ago.
Hugo Hodge, Jr., WAPA’s executive director since Jan. 1, said the hospital presently has an outstanding debt of more than $4 million dollars. WAPA attorney Lorelei Farrington also expressed concerns about liability issues that might arise from entering into a service contract with a third party such as Lang’s Electric. Juanita Young, who chairs the board's finance and audit committee, moved to deny the hospital’s request, citing WAPA’s own economic woes and its established policies. She suggested the hospital might seek help from the Legislature to resolve its financial obligation to the authority.
In other matters, the Board approved payment of the annual assessment to the Public Services Commission (PSC) of $796,449 in quarterly installments. This amount represents WAPA’s portion of the PSC’s annual operating budget of $1.5 million. Based on a formula established by legislation, the assessment is calculated as a percentage of the total revenues of all the regulated utilities in the Virgin Islands.
The board authorized WAPA to issue up to $6 million in general obligation notes to secure a line of credit with First Bank and Banco Popular de Puerto Rico. The credit line would service as a source of ready cash for payment of costs associated with WAPA’s fuel hedge program. Under the fuel hedge program, WAPA is protected against short, sudden spikes in fuel costs, but does not benefit if there is a sudden sharp drop in fuel prices.
Taking advantage of improving interest rates, a resolution was passed authorizing WAPA to refinance electric system revenue bonds issued in 1998 series and to assess issuing additional bonds to finance several electric system capital improvement projects.
The board approved a purchase order addendum for a maximum of $135,560 to Turboserve Corporation to complete repairs to Unit No. 20 gas turbine in St. Croix’s Richmond Plant. Once repairs are completed, the turbine will be fully prepared to accept connection to the new waste heat recovery boiler anticipated for completion in September. The repairs will cost a total of $335,560.
Other contracts approved by the board Thursday included:
— Jamesy Repair Maintenance and Construction to repaint the Estate Richmond Water Storage Tank and place a gravel base at the tank’s perimeter, for no more than $361,856;
— Blue Stone Services LLC for the installation of transformer pads, manholes and electrical duct banks for the Double Bus Double Breaker Switchgear project at the Randolph Harley Substation, for no more than $766,700;
— Electric Supply of Tampa to supply additional 34.5kV and 15kV cables for the Harley Substation Project at a cost of no more than $133,492;
— GEC LLC for the installation of Phase I of the fire suppression system in the Richmond Power Plant at a cost not to exceed $295,297.
Finally, Alphonso Franklin, Acting Chairman, who also serves as Vice Chairman and Chair of the Board’s Planning and Economic Development Committee announced his resignation from the Governing Board effective Jan. 1 after seven years of service. Franklin, who forwarded his resignation to the Governor in December, will serve until a candidate is selected by the Governor and confirmed by the Legislature.
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