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HomeNewsArchivesWAPA Looks for More Oversight in Propane Gas Agreement

WAPA Looks for More Oversight in Propane Gas Agreement

The V.I. Water and Power Authority board held a special meeting Wednesday to approve upgrades to the agency’s maintenance management system, along with an agreement that would allow WAPA to be more directly involved in the process of converting the authority’s existing turbines so that they burn both propane gas and fuel oil.

The agreement modifies a small section of the contract between WAPA, Vitol Virgin Islands, GE International and GE Parts International, which will be providing the parts and services needed to convert the turbines – three turbines on St. Thomas and four on St. Croix.

“This is part of the current agreement in place between Vitol, GE and WAPA, but with this, the authority has more oversight during the conversion process and it also makes sure that all guarantees and warranties are passed directly on to WAPA, instead of a third part,” explained Gregory Rhymer, WAPA’s chief operating officer, during the meeting. Rhymer added that all other parts of the contract will stay the same.

WAPA signed an agreement with Vitol in July in hopes of transitioning the territory from fossil fuel to propane.

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In an official signing ceremony at Government House, several officials described Vitol as one of the "strongest and most creditworthy companies in the United States," and said that the agreement was not only a major change for the authority, but for the entire community.

WAPA’s governing board voted unanimously to move ahead with the agreement during a meeting held at Government House just a few hours before the signing.

A leading energy trader with more than 30 offices worldwide, Vitol is financing all upfront capital costs associated with the project – including the construction of infrastructure necessary to deliver, receive and store the propane, and the conversion of WAPA’s turbines by General Electric to burn both propane and diesel fuel.

According to WAPA Executive Director Hugo Hodge Jr., the authority will only begin paying in 2014, once the propane is delivered. At that point, WAPA will be metered and will be charged for whatever fuel is used to make power, Hodge explained during the ceremony.

The capital cost of new facilities on St. Thomas and St. Croix will be amortized over seven years – with an option for complete repayment by WAPA after five years.

During Wednesday’s meeting, the board also authorized Hodge to enter into an agreement with Total Resource Management for the development and installation of the Maximo 7.5 computerized maintenance system, which would allow the authority to better identify problems in the field, plan repairs and manage costs. The contract totals $592,606.

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