Serious financial concerns about the V.I. Water and Power Authority’s finances, expenses and cost saving measures kept Public Service Commission members from approving Tuesday an increase in electric Levelized Energy Adjustment Clause rates that would have gone into effect at the beginning of the year.
An interim LEAC was approved in late June, to run through December. While Tuesday’s agenda, which was released weeks ago, included a new proposal from the authority, PSC members said they hadn’t received the new filing until last Friday. In the meantime, the PSC’s advisors on WAPA matters, Georgetown Consulting, said they had unanswered questions while PSC members said the authority has met the conditions of the previous LEAC increase, which includes outlining a plan for new generating units and reducing overhead.
In June, WAPA’s interim rate bumped the electric LEAC up to 18.27 cents per kilowatt hour, and Tuesday, the PSC voted to keep that rate in place until issues with the filing are resolved. WAPA had requested an increase to 18.87 cents per kilowatt hour starting Jan. 1.
At Tuesday’s meeting, WAPA Chief Operating Officer Clinton Hedrington, Jr. explained:
– The installation of WAPA’s new Wartsila units, some of which were expected to be online in January and form the basis for all future LEAC filings, is delayed by three months due to delays in purchasing and installing a firewater system. Hedrington said much of the foundation has been laid, but financing is a problem, and then the parts have to get on island.
– The purchase and installation of new Aggreko units have been delayed because of permitting and financing issues.
WAPA officials pointed out that a surcharge for the Aggreko units needs to be in place in order for the authority to bring in the revenues needed to cover the commissioning and use, to which commissioners suggested that the authority look at filing a comprehensive base rate petition, expected in early 2019. The addition of the units are expected to bring down the authority’s fuel costs, which could, in turn, reduce the electric LEAC.
Within nearly two hours Tuesday, the group also discussed plans to diversify WAPA’s energy portfolio, including a new rooftop solar project that Hendrington said is moving along as the authority looks at passing new interconnection standards for homes and businesses.