After months of speculation, the V.I. Water and Power Authority board officially announced they had signed a contract with Karl Knight as the utility’s new chief executive officer, effective Monday.
The announcement came out of executive session at the board’s regular meeting Thursday, though no other details about Knight’s contract were released at the time. A vote to begin negotiations with Knight was approved at an executive session at a previous board meeting in June, but no announcement was made at the time as the board finalized the paperwork.
The board also reported out that it had approved a memorandum of understanding with Ernst and Young, which the Public Finance Authority Board authorized in June as the turnaround management company for the utility. The PFA’s decision followed Gov. Albert Bryan Jr.’s State of Energy Emergency declaration in April, which aimed to address WAPA’s financial challenges.
Key to the emergency declaration is the ability for the government to tap into the Budget Stabilization Fund for approximately $11 million to cover outstanding utility bills owed by the territory’s two hospitals and V.I. Waste Management Authority, along with funding for the turnaround management agency, which was mandated in a bill-turned-law by the Senate without a designated funding source.
The contract was approved by the PFA board unanimously for an amount not to exceed $500,000. According to officials, five proposals were submitted and vetted by an Evaluation Committee, to include Berkeley Research Group, PA Consulting Group, Inc., Ankura Consulting Group, LLC and FTI Consulting.
Ernst & Young’s initial report, due within six months, will focus on VIWAPA’s financial condition and will include assessments of ongoing projects, organizational structure, energy plans, debt management, water quality, and service quality standards, as laid out by law.
Read more about the requirements here.
Meanwhile, reached after the meeting Thursday, Knight outlined his initial vision for the authority, drawing not only upon his most recent work with the Incident Command Team for the energy State of Emergency and the governor’s chief of staff but from his previous work at WAPA – five years as an engineer and three as a strategic planning manager. Knight said he was the first recipient of WAPA’s Alva McFarlane Scholarship Program, which offers up to $60,000 to local high school graduates or University of the Virgin Islands freshmen and sophomores studying engineering.
“WAPA made an investment in me many years ago – this is my opportunity to give them a return on that investment,” he said.
Embracing Decentralized Energy
Knight said his vision includes a strong focus on decentralized energy sources, integrating solar and wind power into the grid. “We want to work with community and federal partners to explore these options,” he said. Community solar projects, residential solar installations, and advancements in battery storage technology are central to the strategy.
“Battery storage is now at a price point where it’s affordable, with available tax credits and rebates. Just like residents have cisterns to store water, they should be able to store electricity,” Knight explained. He emphasized that battery storage could provide critical backup power during outages, which are inevitable on tropical islands. “Having battery storage that can buy you two to three hours is something that is an increasing trend and something we can embrace,” he said.
Knight also highlighted the importance of managing load on the grid. By turning batteries on and off and employing other demand-side solutions, the utility can better control power distribution during peak times. “This approach allows the utility to work hand in glove with customers,” Knight said.
He acknowledged that small island grids face unique challenges, often leading to frequent outages. He pointed to similar issues faced by islands like Puerto Rico and Guam. “We’re all fighting to figure out the best solutions for small islands,” Knight noted, mentioning the support from the U.S. Department of Energy in addressing these problems.
“I want to go in with an open mind and not take anything off the table. We need to find the right solutions, especially given our financial bind,” Knight said. He expressed a desire to learn from other similarly situated utilities to understand what works and what doesn’t.
An advocate for public ownership, Knight emphasized that WAPA’s assets must remain with the people of the Virgin Islands. “I won’t compromise on that. It’s a public utility, and the assets need to be owned by us,” he asserted, noting the importance of public assistance from agencies like the Federal Emergency Management Agency, which announced in June plans to fund the full replacement of St. Croix’s Richmond Power Plant.
In her report to the board Thursday, WAPA interim CEO Ashley Bryan said the utility is finalizing a scope of work and fixed costs for the project so that the grant can more quickly be approved. Two generators – Units 14 and 15 on St. Thomas – are also expected to be replaced, she said, adding that the deadline to submit the paperwork to FEMA is the end of September.
Meanwhile, Knight promised to keep the public updated on progress as it unfolds. “It can be rough, but if we can show progress, it gets better and better,” he said. He welcomed public scrutiny, believing it would strengthen WAPA’s operations and build community trust and said he is clear-eyed about the challenges ahead.
“I’m not naïve,” he said. “I understand the challenges and concerns. But I believe I have the experience, connections and relationships that will bode well for WAPA to achieve the ambitions that it has. It’s going to be a heavy lift, but if we have the support of the entire community, we can turn this ship around and get the utility on solid footing.”
