Sept. 12, 2008 — As the territory wrestles with an energy crisis, senators Friday approved a bill that calls for the V.I. Water and Power Authority to sign up with a power producer that can deliver the goods quickly and inexpensively.
The bill would have WAPA enter into a power-purchase agreement with a producer that could be up and running within two years and sell electricity to the utility at a cost not to exceed 15 cents per kilowatt hour.
""The economy of the Virgin Islands now hangs in the balance because of high utility costs," said Sen. Norman Jn Baptiste, the bill's sponsor, during Friday's meeting of the Committee on Government Operations and Consumer Protection. "And if we're serious about addressing energy terms of the territory, short and long term, here is the solution."
The bill — dubbed the Emergency Public Utility Rate Reduction Act of 2008 — has come before the Senate in many forms over the years, beginning with the ill-fated Jobs Creation Act, which fell apart after negotiations broke down two years between WAPA and Innoventor Technologies. Jn Baptiste twice sought to include some of the act's provisions into what was then called the Public Utility Rate Stabilization Act — a proposal that sought to freeze levelized energy-adjustment clause (LEAC) rate increases. Neither attempt was successful.
This time around, the bill has been simplified, focusing on the execution of a power-purchase agreement between WAPA and "any existing, certified small power-producer or co-generator in the territory." The small-power producer would not be dependent on fossil fuel, and would be able to begin generating and selling power to WAPA no more than two years after a power-purchase agreement is finalized and executed.
The government, through the Public Finance Authority, is also authorized to offer the power producer a loan guarantee up to $50 million to expand any of its existing facilities or establish "related downstream enterprises" that would help to create more local jobs, according to the bill.
Any savings realized by WAPA as a result of the power-purchase agreement must be immediately passed onto ratepayers, the bill says. WAPA must begin negotiating 30 days after the bill is signed into law, and has 180 days after that to put an agreement in place. The expedited schedule supports the push by WAPA's executive director to have a state of emergency declared on energy in the territory, Jn Baptiste said Friday. (See "WAPA Chief Calls for State of Emergency.")
Earlier this year, senators passed a resolution calling for the governor to go back to the negotiating table with Hovensa to revise the terms of its agreement for the sale of oil in the territory.
"We have to get together to get the governor to declare a state of public exigency, which will also help to expedite the renegotiation of the Hovensa agreement," Jn Baptiste told senators as he pushed for their support of the bill. "Leadership demands that we do something about this situation, both in the short term and long term, so here it is."
The bill — which was approved as an amendment in the nature of a substitute — passed unanimously, with votes in favor coming from Sen. Liston Davis, Carlton "Ital" Dowe, Shawn-Michael Malone and Alvin L. Williams.
Absent from Friday's session: Sens. Juan Figueroa-Serville, Terrence "Positive" Nelson and Basil Ottley Jr.
During the first half of the meeting, senators also took testimony from Government Employees' Retirement System officials, who said they are still trying to figure out how much the government owes in retroactive annuity payments to retirees. The debt has been building since the late 1980s, officials said, and may put a heavy financial burden on the retirement system, which is still operating on a more than $1 billion unfunded liability.
Currently, more than 2,000 retirees are entitled to receive retroactive annuity payments, according to GERS' Administrator Austin L. Nibbs. While working for the government, these individuals were given pay raises that were not factored into their notices of personnel action (NOPAs) when they retired, he explained.
Senators said GERS would be called in to give another update once officials have met with members of the governor's financial team.
Present during Friday's meeting were Davis, Dowe, Jn Baptiste, Malone and Williams.
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