Proposal Would Extend Fuel Oil to End of Year

Source Staff
The V.I. Water and Power Authority is working with Hovensa on a proposal from the refinery to provide fuel oil from July 1 to the end of the year, according to WAPA. At its regular monthly meeting Thursday, WAPA’s governing board authorized Executive Director Hugo Hodge Jr. to negotiate terms with Hovensa on its proposal.

What Hovensa is proposing is an alternative to WAPA’s Invitation for Bid, issued on March 16 in search of a new fuel supplier, after the refinery announced it would only supply WAPA until June 30.

Under an addendum to its contract with WAPA, Hovensa is offering additional price discounts that will give the utility – and its customers – better prices than would likely be available from other sources, WAPA said.

In a statement, Hodge said this approval will give WAPA additional time to consider further options in finding a more permanent supply of fuel.

“The low response to the fuel request for proposal was expected due to the recent announcement of the extension on Hovensa’s behalf to provide oil to WAPA until December,” said Hodge. Nevertheless, Hodge said WAPA is in the process of reworking the original IFB based on useful information from potential bidders and requirements of the Environmental Protection Agency.

In his Executive Director’s Report, Hodge outlined a series of other initiatives that are in progress to address WAPA’s energy needs. “We are very close to executing the power purchase agreements for solar energy,” said Hodge. “I imagine that prior to next month’s board meeting we’ll have to call a special meeting to present the PPAs for the solar projects.”

WAPA issued a request for 10 MW of solar power last year and negotiated with the six most responsive bidders.

As for liquid natural gas, Hodge said the utility is moving ahead with determining its potential. A technical group will be visiting the territory in early May to examine the configuration of the power plants and gather the metrics necessary to determine the feasibility of LNG. He also reported on the temporary 22-megawatt power plant and water treatment system that arrived last week, which when installed and fully operational, will allow technicians to perform needed maintenance to other generators in St. Thomas’ Harley power plant.

Hodge said the finance team would be sending the preliminary official statement necessary to finalize the financing of the temporary unit on Thursday.

The board also discussed phase II of the study that determined the interconnection to Puerto Rico’s grid as feasible.

A contractor has been selected to study the potential for maximum penetration of intermittent renewables such as solar and wind on WAPA’s system.

The board’s authorization of WAPA to award a two-year contract to McGeown Associates LLC for the development of a WAPA Energy Services Business Unit, will provide a platform to educate and provide funding options for WAPA customers in the energy efficiency and renewable spectrum. Hodge said the business unit will be a value added service for customers.

Employees of the unit will go into homes and businesses and perform energy audits to find ways customers can save money through retrofits of energy efficient light bulbs, air conditioning and appliances. “There is a revolving fund that will be used to fund the improvements,” said Hodge. “The fund will pay for the upfront costs, so the customer will have no out-of-pocket expenses.”

Hodge said the customer’s monthly savings will be used to repay the revolving fund and when those costs are paid off, customers will be able to enjoy further savings.

The board also approved an amendment to the contract with J.U.B. King & Associates to construct a retaining wall and the additional $75,875 needed to complete the task. Transmission and Distribution Director Clinton Hedrington said this change will make space for the construction of the permanent Seven Seas reverse osmosis water production facility at the Randolph Harley Power Plant. The construction will also provide an access road to the site and the foundation for a future warehouse and storage building for the Line Department. This construction is slated to be completed by April 30.

The board approved a one year lease, with an option to renew for another one year period, for the rental of office space located on the second floor of No. 1 Beltjen Place on St. Thomas, in the amount of $15,000 monthly plus operating expenses not to exceed $3,000 monthly for the first year of the lease. This location will house the customer service, customer accounts and the meter reading departments which were destroyed in a recent fire.

The board also approved a three-year lease with St. Thomas Liquor Co. for office space rental for other displaced St. Thomas employees due to the fire at the Subbase administrative building. The lease, for the sum of $461,250, is for three years with an option to extend for two additional terms of five years.

A contract with General Electric International in the amount of $768,000 was approved by the board for the purchase and installation of Unit 10 and 11 Turbine Control System. The current control system is out of date and no longer supported for parts by the manufacturer. With this update, WAPA will have the capability of future expansion with the latest communication protocols and will be capable of interconnecting with existing plant systems.

During the meeting, Board Chair Juanita Young thanked Chief Financial Officer Joseph Boschulte for his service to WAPA for the last 15 months. Boschulte has recently accepted the position of President and Chief Executive Officer of the West Indian Company.

Attending the meeting were Young, Vice Chair Gerald Groner, Secretary Noel Loftus, Licensing and Consumer Affairs Commissioner Wayne Biggs, V.I. Energy Officer Director Karl Knight and Donald Francois. Absent were Cheryl Boynes Jackson, Planning and Natural Resources Commissioner Alicia Barnes and Brenda Benjamin.

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