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PSC Says WAPA Keeping It In Dark About Fuel Supplier Dispute

The Water and Power Authority has not given the Public Services Commission information about billing and payment problems with its fuel producer, and members learned about it through news reports, PSC officials said in a statement Monday.

WAPA reported over the weekend that VITOL; its propane supplier and contractor for converting generators to propane use, suspended deliveries as of last Thursday due to a contract dispute. WAPA Executive Director Julio Rhymer said WAPA has switched back to fuel oil during the impasse and that there would be no service interruption. (See Relate Links below)

WAPA officials listed several factors they said led to the cash shortfall. They pointed to outstanding hospital utility bills and unpaid streetlight bills, which exceed $26 million right now; more than $3.9 million in “assessments” by the PSC to pay its consultants to help regulate WAPA, and a delay in establishing a base rate that will cover its actual expenses.

In a statement from PSC spokesperson Lorna Nichols, PSC officials complained that “WAPA has not provided any information to the Commission as to why the Authority is unable to pay its fuel supplier, if that is in fact the current problem.,” and that “(d)espite filing for a new LEAC on March 30, and despite the on-going efforts to resolve WAPA’s base rates, WAPA failed to deliver either the February 23, 2017 or the April 19, 2017 notice from VITOL to the Commission or advise why this has reached crisis status.”

The PSC took issue with WAPA’s account of the reasons for its financial woes, seeming to suggest WAPA actually has sufficient revenues and is being deceptive, saying the “costs of the VITOL provided propane have been collected through the LEAC since WAPA began using that fuel,” and that VITOL’s operations and maintenance costs were also authorized in the fuel surcharge and later in the base rates.

But “apparently those funds collected from ratepayers have not been paid to VITOL,” the PSC statement said.

The PSC statement makes no mention of the $26 million – plus outstanding government utility bills and says the PSC “has no information that explains WAPA’s inability to pay its current fuel costs.”

It does respond to WAPA’s criticism of $3.9 million in PSC assessments, saying “The regulatory costs (assessments) which WAPA uses as a distraction are a normal part of utility operating costs, here as elsewhere in the United States.”

The assessments have also not been paid, according to the PSC, and “are significantly less than one percent of the revenues of WAPA, and have more than paid for themselves over the years.” Most of WAPA’s revenues are pass-through payments to fuel suppliers.

The PSC statement also mentions payment disputes WAPA has had with fuel oil suppliers Glencore and Trafigura. Glencore was paid after a special government appropriation. Trafigura filed suit in 2016 for $26.6 million in payment for oil already delivered. The dispute is still in court.

WAPA has been struggling financially for many years and its credit rating was downgraded to junk status in 2016.

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