The U.S. Virgin Islands Water and Power Authority got permission Wednesday to explore buying fuel from three alternative providers. It’s an effort to keep the lights on after the long-time preferred supplier cut off propane deliveries over a dispute about, what the Authority calls, an unrelated debt.
Propane supplier Vitol estimated WAPA would run out of fuel on St. Croix Wednesday and go dry on St. Thomas/St. John Friday. The move was meant to force payment on an old debt for infrastructure Vitol helped bankroll. The company and WAPA disagree on the amount owed.
WAPA switched to diesel Monday to avoid potential blackouts. It’s a less-than-ideal fix. Diesel is more than twice as expensive as propane and the territory’s older diesel generators are less efficient than the newer propane generators from Aggreko and Wartsila, said WAPA CEO Andrew Smith.
“When we operate on diesel our efficiency degrades, so effectively, our miles to gallon, if we were driving a car, gets worse,” Smith said.
Smith said WAPA doesn’t owe Vitol for propane. It paid between $380,000 and $400,000 in advance before each delivery. A new propane provider might require a different arrangement so the Authority’s governing board authorized payments of up to $500,000 a day through Jan. 6.
“All else being equal, it will be spending a dollar with a vendor where we would be spending a dollar with another vendor,” Smith told the board.
The arrangement will be reevaluated after the next board meeting, he said.
“Given that this situation remains very fluid, I did not want something to come up during the holiday,” Smith said. “Hopefully we’ll have a lot more clarity.”
Alternate propane suppliers could include Carib LPG, Rubis, Antilles/Parkland, or Polaris. Smith said he had already spoken to the companies. All have operations in the Caribbean.
The board also authorized a new two-year lease agreement with Aggreko for use of their propane generators. A provision in the lease allows WAPA to no longer use Aggreko’s equipment and rely solely on the Wartsila generators the Authority owns outright.