After more than two hours of discussion, a back and forth between the Public Services Commission and V.I. Water and Power Authority officials over new generation projects and a lack of information from the utility to set new Levelized Energy Adjustment Clause rates, the PSC tabled the discussion until it’s next monthly meeting without taking further action.
Friday’s PSC meeting put WAPA in the hot seat over a range of issues, starting with a set of proposed projects to increase generation and capacity in both districts. The discussion flowed into WAPA’s proposal for a new LEAC rate for July through December. PSC members said any addition of renewables or more efficient units on the grid could bring down rates, but at this point, they needed more information to determine, among other things, what WAPA’s avoided energy or deferred fuel costs are.
“These answers have to be figured out – we’re supposed to be walking into these meetings with reports, stipulated agreements between different parties, not finding the answers ourselves,” PSC Chair David Hughes said after a third issue, a petition to approve changes to a power purchase agreement between WAPA and Lanco USVI, LLC, was tabled after some documents were not included in the request. A second power purchase agreement, with Advance Power for a wind project in Estate Bovoni, raised tensions higher as PSC contemplated setting the numbers on its own and launching a pilot project in the absence of any progress from the Authority.
“My greatest concern is that WAPA will simply obstruct this,” Hughes said. “I just don’t know how to get WAPA to care.”
Hughes’ comment came after a report from WAPA Executive Director Lawrence Kupfer about three specific projects that officials said are in the hopper but are in various stages of approval for Federal Emergency Management Agency or U.S. Housing and Urban Development funding. The first, a solar project at St. Croix’s Henry E. Rohlsen airport, is expected to add five to 10 megawatts of generating capacity. The second is another solar project on St. Croix for approximately 20 megawatts and the third calls for 15 to 16 megawatts of wind power for St. Thomas.
Kupfer said all applications have been completed but the Authority still has no authorization from FEMA or HUD to pursue them. FEMA still needs to deem some of the projects eligible. Asked by Hughes whether it made more sense to put one or two out for a long-term bid and accept the cost of a power purchase agreement with a private entity to get them online, Kupfer said the Authority preferred to go the federal route and work with disaster funds promised for mitigation.
While it seemed early in the discussion that the PSC seemed to understand the approach, the tide shifted for WAPA later on, after representatives from Advance Power said they have been ready to move forward with private financing for the Bovoni wind farm while WAPA continues to wait for federal approval. While Hughes said he was ready to approve a PPA with Advance “right now,” the question about WAPA’s avoided cost still remained, leading the PSC to table the issues so that WAPA, Advance and the PSC’s technical team could continue negotiations. Results of those talks will be reported to the PSC’s meeting next month.
In a month, PSC members said they would also be ready to set a new LEAC rate, whether or not WAPA can get them the information Georgetown Consulting said was outstanding, including an accurate deferred fuel balance number that Georgetown said could in part be attributed to ups and downs in the billing cycles.
