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HomeNewsLocal newsConsumer Advocates Push Back on WAPA’s Latest Rate Hike

Consumer Advocates Push Back on WAPA’s Latest Rate Hike

The WAPA facility on St. Croix (Source file photo)

Residents incensed by continual Water and Power Authority rate increases met on Facebook Thursday with the Virgin Islands Alliance for Consumer Justice to get the latest one – a 2.3 cent LEAC hike that went into effect July 1 – reconsidered, or, they hope, reversed.

The Public Services Commission, which approved the increase in June, has limited powers to regulate the utility, said alliance leader Clarence Payne, and “WAPA takes advantage of it all the way. I could visibly see the commission roll over and give WAPA what they wanted.”

WAPA charges customers based on two figures: a base rate, and a second rate known as the LEAC, or Levelized Energy Adjustment Clause, which allows the utility to recover its fuel costs and related expenses. It’s the LEAC portion the commission allowed WAPA to increase. While 2.3 cents per kilowatt-hour may not sound like much, it comes atop a base rate that Payne called unsupportable.

“We remind you that Virgin Islanders already pay the highest electric rates in the Caribbean region and among U.S. jurisdictions,” the alliance wrote in a motion for reconsideration – a right of any resident or group to have their concerns heard within 30 days of the decision. “WAPA’s high electric rates and frequent service interruptions negatively impact the territory’s residents, especially small businesses, the elderly living on fixed income, and those with health issues.”

Alliance members Mark Wenner, an economist, and Jezellia Sujanan, an accountant, said the commission lacked the data to make an informed decision when it approved the rate increase in June.

“We have to push the regulators to do their jobs,” Wenner said. “If your duty is to assess and vote and set new rates, you can’t do it without data at hand.”

PSC Chair David Hughes told the Source Thursday evening that the body granted a hearing of reconsideration of the matter within 30 days, which would also give the PSC the chance to explain its decision to support the increase.

“We do not comment on the substance of open dockets outside of our hearings. Wouldn’t be fair to all parties involved. Think about us as you would a judicial court of law with an open case. That said, I can offer that the commissioners all individually reviewed the request, and we determined according to our process for these things, that we will grant a hearing for reconsideration of the matter within the 30-day statutory requirement. Without commenting on the merits of the allegations raised, it was clear to the Commission that this request, at the least, demonstrated both a need and an opportunity to better inform how our decision was reached,” Hughes said in an email.

Residents can watch last month’s three-and-a-half-hour hearing on Facebook, which the PSC streamed because of the sensitivity of the issue. During the hearing, WAPA and Georgetown Consulting’s Larry Gawlick examined the fuel cost data from the period that WAPA filed its initial request to when it was considered. In the end, WAPA agreed that the rate could be lowered from its original request of 2.58 cents to 2.3 cents, based on the fluctuation in fuel cost prices.

WAPA’s engineering team also explained its ongoing strategy to diversify the authority’s power portfolio and stabilize electric service, including building smaller blocks of power generation that can weed out the larger, more unreliable units. While the process will take about a year, it has started, and WAPA’s engineers asked the PSC – and community – to continue to be patient as the infrastructure is put in place.

The hearing came on the heels of a series of district or territory-wide power outages, which PSC members said was balanced out with the need for WAPA to keep recouping its fuel costs. “They use the fuel, it’s a separate cost, people should pay for that. It is the other side of the ledger. It is the bad decisions that WAPA has made over the years,” PSC member Andy Rutnik said, emphasizing the need for balance.

In its motion, the alliance called on the commission to further justify the rate hike with hard data, including:
– The data that was used, or should have been used, to calculate the new LEAC rate;
– The data – generator efficiency, fuel costs – that justifies WAPA’s request;
– WAPA’s 2019 and 2020 audited financial statements, which should be the basis for rate decisions.

The motion also asks the commission to investigate the base rate and lower it based on WAPA’s 2019 financials and delay the increase by 60 days to educate the public on how the LEAC rate was determined and allow a public comment period.

The Alliance for Consumer Justice formed two years ago with the philosophy that when a community experiences an injustice, it is responsible to do something about it, not just complain, according to Payne. The group first took on a 10 cent WAPA increase, collecting 3,000 signatures. The following year it succeeded in getting gas prices lowered with a photo protest showing the high pump prices all over St. Thomas and St. John.

“We as Virgin Islanders have been too passive, accepting these very high rates of electricity for close to 50 years,” Wenner said. “We need the PSC to do its job better. Look at the numbers. Be professional. Protect consumer interests.”

The group said it will roll out its organizing campaign Monday with a petition circulated online and shared on the alliance’s Facebook page.

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