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HomeNewsLocal newsBasic Facts Disputed in PSC-Mandated WAPA Audit

Basic Facts Disputed in PSC-Mandated WAPA Audit

Basic facts, like how many people work at the V.I. Water and Power Authority and if that number is growing or shrinking, are in dispute in an audit performed by Vantage Energy Consulting at the insistence of the Public Services Commission, according to WAPA and Vantage officials testifying to a Senate committee Monday.

After the PSC mandated the audit, WAPA’s governing board agreed to pay Vantage to conduct the audit in February 2014. The report, which came out earlier in 2015, had a tight focus on lowering rates. To do so, it recommended management changes, buying new generators, eliminating "standpipe" water service and hiring more contractors from outside the territory, among other measures.

WAPA Executive Director Hugo Hodge Jr. told the Committee on Energy and Environmental Protection that 25 of the 34 recommendations offered by the audit report are being carried out and the other nine are seen somewhat differently by WAPA and the auditing firm, but are being considered for the Virgin Islands.

In some areas WAPA and Vantage disagree on the best course of action. But in others, they simply disagree on very basic facts.
Sen. Tregenza Roach asked Hodge why, according to the audit, WAPA had increased staff when most utilities have decreased their staffing levels by 20 or 30 percent.
Hodge said, "This is a perfect example of why we can’t take the audit as the gospel as written by Paul. When I came to WAPA (in 2008) we had 661 employees and today it is 598. We have had a significant reduction in staff, all by attrition I might add. The numbers in the audit are completely wrong," Hodge continued.
Roach said the audit counted 693 employees in 2015.
Hodge again said the correct number is 598.  "Although we have seen a reduction, the reason we haven’t seen the same reduction as other utilities is we have two separate utilities, with two grids, two sets of maintenance staff. Everything is not interconnected," Hodge said.
Sen. Nereida "Nellie" Rivera-O’Reilly asked Vantage President Walter Drabinsky, who appeared via videoconference, about the numbers and what the "authority alleges," as she put it.
Drabinsky stuck to his guns, saying they got the numbers from "a multi-page spreadsheet" supplied by WAPA’s human resource department that had "very detailed tables." He said on Sep. 10, 2015, they gave WAPA the chance to "verify the data," and the utility asked what the source was.
"There are no errors that we can find in the data we received from WAPA. And we cannot see any errors we made," Drabinsky said.
Rivera-O’Reilly asked, "Is your testimony that you stand by the information in the audit?"
Drabinsky confirmed. "That is correct.”
Later Hodge also said he stood by his account. "I made a statement here under oath and on the record," Hodge said.
WAPA and Vantage also disagree on whether the utility selling water to delivery companies at its standpipes is a money loser, how much it costs to operate, and whether or not it is manned.
Roach asked Hodge about the cost of maintaining the standpipes, versus regular service to customers through public water lines, saying Vantage cited a cost of around $750,000 per year to operate, with revenue of only $150,000.
Hodge said, "That is one of the things where I don’t understand where their numbers are coming from. The standpipe is automated. It used to be manned, but not anymore. … And it is the only place we collect the money right away," instead of a month later, after sending out bills, he said.
Hodge also said the aged pipes, which lose water and stain the water with rust, need to be replaced. WAPA plans to put replacing all pipes out to bid sometime in the near future, he said, adding that it would cost in the neighborhood of $200 million for each district. But Hodge said replacing the pipes should be able to pay for itself over time by reducing line losses and periodic flushing to reduce rusty discoloration.
Hodge said he disagrees with Vantage on getting rid of its legacy steam-based water purification system altogether, saying that it would save money, but would also leave the territory’s residents vulnerable in case a hurricane or other disaster interrupted reverse osmosis water production.
Similarly Hodge said he disagrees with recommendations to save money by hiring more outside contractors because it can take a long time to get outside contractors to the territory. It is faster and safer to have those skills on hand in the territory, he said.
Sen. Sammuel Sanes, the committee chairman, asked Hodge about the impact to its bottom line of large hotels going off the grid to use their own large-scale diesel generators and contracting their own reverse osmosis water production systems.
Hodge said he found it aggravating that large commercial systems like that get approved without controversy or much question, without the sort of concern for the environment that is expected of WAPA.
"When WAPA generation is being discussed, there are big hearings," Hodge said. “We hear we want to see emissions cut. We want to see more renewables. We want to see solar and wind and so forth," he said. "But when large producers are coming off the grid to burn whatever they want, there are no alarm, no pictures on the front page, no big uproar about the news it is going to be diesel. It is just "okay, it ain’t WAPA so we ain’t worried," he said.
In the afternoon, the committee heard a presentation from Paul Chakroff on the use of pumped water and/or state of the art batteries to store energy to allow more solar and wind energy than the power system can currently handle.
Chakroff, who is a partner with Island Energy Innovations, told senators the price of batteries is going down and may now be a viable alternative, but pumping water uphill is a proven technology that would more or less permanently solve the problem of how to store excess solar and wind energy.
Chakroff said his organization wants the Legislature to fund a feasibility study to look at the question in detail. Island Energy Innovations is proposing the Legislature reprogram $500,000, which was originally appropriated for Durant Tower Construction for the purpose of assessing the feasibility of constructing renewable energy generation, storage and transmission infrastructure on the islands of St. Croix and St. Thomas/St. John.
No votes were taken at the information-gathering oversight hearing.
Senators present were: Sanes, Rivera-O’Reilly, Roach, Sens. Marvin Blyden, Clifford Graham, Kurt Vialet and Almando “Rocky” Liburd.
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