WAPA GIVES UPDATE ON BASE RATE

St. Croix--The Committee on Government Affairs, Veterans, Energy and Environmental Protection, chaired by Senator Sammuel Sanes, met on Friday in the Frits E. Lawaetz Legislative Conference Room, St. Croix.

The Committee heard from the Virgin Islands Water and Power Authority’s (WAPA) management team regarding the proposed base rate increase, status of Smart Meter residential installation, and Smart Meter reading practices. Accompanying WAPA’s team were the Chairwoman of WAPA’s Board and the Executive Director, Public Service Commission (PSC).

The Committee also heard from Juan F. Luis Hospital’s (JFLH) Chief Executive Officer, Schneider Regional Medical Center Chief Executive Officer, and Waste Management Authority (WMA). Items discussed were, amount owed to WAPA and measures being taken to reduce the debt to the utility.

Julio Rhymer, Executive Director, WAPA, said in his testimony that, the Authority filed for a base rate increase from the PSC because at the time, the Authority was experiencing a severe liquidity problem and lacked adequate cash to pay for operations, to the point that it became necessary to postpone payments to certain vendors, one of which, a former fuel supplier, has sued the Authority.

According to Rhymer, the Authority’s cash shortage at the time stemmed from several factors—declining sales, large government receivable and increased cost of operation. He pointed out to the Committee that the Authority wanted approximately $14.5 million that would have given it the much-needed cash infusion to continue with its operation.

The action taken by PSC to approve the base rate increase and then rescinded on it said Rhymer, has stunned and is a concern to investors. In so doing, the Moody’s Investor Services downgraded the electric system senior and subordinate electric system revenue bonds.

In respect to the status of Smart Meter residential installation( AMI),  Rhymer stated that the AMI is designed to, among other things, automate the meter reading process, improve the accuracy of meter reads, expedite billing, permit remote switching of a customers’ electric services at the meter, minimize meter tampering through a system of alarms, permit pay-as-you-go service delivery, and allow customers to monitor and adjust their consumption based on real time information about electric use and cost.

Elizabeth Armstrong, Chair, Governing Board, WAPA said in her testimony that WAPA’s financial outlook is directly tied to the revenues generated by the rates it charges its customers for electrical and water services. She added that, beginning at the end of this year or early 2018 when the first set of new generators are expected on island, and continuing through the next several years, WAPA will bring in reliable, efficient generation capacity to the Randolph Harley power plant in St. Thomas.

Armstrong told Committee members that the Board believes that its plan provides the opportunity for WAPA to improve on the past, while supporting the mission of the lowest cost, safe and reliable power for the rate payer.

 In an update, as to money owed to WAPA, Roger Merritt, Jr., Executive Director, VIWMA said that, as of February 28, 2017, they owed WAPA $414,324, and that they will be remitting payment in the amount of $240, 000 for the month of February by March 31, 2017, leaving a balance of $174,324.

Bernard Wheatley, Chief Executive Officer, SRMC said, despite the fact that SRMC is in an extremely critical financial position, they have remained committed to making payments to WAPA and have done so continuously over the past year. SRMC has made payments totaling approximately $76,000 to WAPA in Fiscal Year 2017. SRMC remits the portion of its allotment that is line itemed for WAPA as soon as it receives its monthly allotment in full. According to Wheatley, their current outstanding obligation to WAPA is $8,166,743.

Richard Evangelista, Acting Chief Executive Office JFLH said, current balance to WAPA is $10,567,660. Year to date for Fiscal Year 2017, the hospital has paid WAPA $136,666. He added that the hospital’s current fiscal condition does not allow the hospital to pay its current WAPA bill in part or full. As of today’s date, the hospital has not yet received its February 2017 monthly allotment.

Donald Cole Executive Director, PSC said based on testimony presented in its meetings, it would appear that the AMI/AMR technology is sound; however, consumer service deployment protocols appear to have short-comings resulting in an excessive number of estimated billing complains and concerns.

Other testifiers were Tim Lessing, Chief Financial Officer, JLH, Johann Clendenin, Commissioner, PSC, and Frank Taylor, Jr., St. Resident/Rate Payer.

Committee members at Friday’s hearing were, Chairman Sammuel Sanes, Jean Forde, Nereida Rivera O’Reilly, Alicia “Chucky” Hansen, Tregenza Roach and Janette Millin Young. Non-Committee members were Senators, Kurt Vialet, Brian Smith, Positive Nelson, and Novelle Francis, Jr.

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