Selling WAPA

Not sure how long you have been around, but you might want to search information about Southern Energy's bid to buy WAPA, what was it 10-12 years ago?

For Sale:
One used utility company in a hurricane-prone area with a 40 year old poorly maintained infrastructure and few spare parts. Diesel generators. High accounts receivable. LEAC included. A real fixer-upper. Ocean view. Serious offers only.

....with exclusive rights over a customer base willing to pay 5-10 times market value for service.

I am a big proponent of the government selling WAPA to a large USA utility company that is a for-profit entity. Since WAPA and the gov. are both out of money, this seems to be the only logical way to change the "norm". The only thing WAPA can do right now to improve things is to pass the risk on to a developer thru a PPA (purchase power agreement) and then they sit back and see what happens.

To sell however, there would need to be 2 considerations. 1) the residents will need to accept change and the latest technologies available (... which may not be perfect, since the utility would need to balance costs, benefits and environmental concerns). 2) The USVI government needs to facilitate new project development and the permit approval process --> and not be a barrier as some elements are now.

A for-profit utility can bring new thinking, technologies and new money. FYI, the LEAC (fuel surcharge) is most so the rate (... about 33 cents per kWh). It is that way, since all the power is produced with fuel oil. It might sit better with people if the constant outages would cease, even with the higher rate to live in Paradise.

The first right step that WAPA has done recently is the Alpine Project that will be burning only RDF. This is considered a renewable fuel and the plant can operate 24/7 --> not like wind or solar. But the government has still not helped to facilitate that suitably. Alpine was selected in August 2009 (... 2 years ago) and they still do NOT have a lease agreement for the STT land. No lease agreement means the permit approval process can not start. The senate must approve the land lease agreement. It would not surprise me it Alpine pulls out.

Southern offered $105 million plus: http://stthomassource.com/content/news/local-news/2000/01/07/southern-energy-makes-new-offer and the legislature, in their infinite wisdom and concern for the people dem, voted it down. You cannot change the status quo, nor sell off "the people's power company" to foreigners. We, the workers, should buy it and run it. Just some of the arguments from that time.

Selling WAPA will not change the price of oil.
Selling WAPA will not make the govt pay their utility bills on time. Will it be ok for the new company to disconnect the hospital or schools because of non-payment?
Selling WAPA will require a HUGE investment by the new company to upgrade equipment. Will the consumers be ok with this cost being passed on to them?

Selling WAPA doesn't fix anything but pass on the problem to a new owner.

Selling WAPA will not change the price of oil.

True but irrelevant, because most places in the U.S. have much lower rates despite the price of oil.

Selling WAPA will not make the govt pay their utility bills on time. Will it be ok for the new company to disconnect the hospital or schools because of non-payment?

A specious argument, because the government takes in plenty of tax money that could be used to pay the hospital and school WAPA bills, it just prefers to waste that money in ways that benefit corrupt individuals.

Selling WAPA will require a HUGE investment by the new company to upgrade equipment. Will the consumers be ok with this cost being passed on to them?

I suspect that if the money WAPA takes in was properly re-invested in the infrastructure -- as opposed to lining the pockets of corrupt government employees -- there would be sufficient funds for upgrades relatively quickly.

Selling WAPA doesn't fix anything but pass on the problem to a new owner.

Arguably incorrect as WAPA's problems are its management, and efficient management could repair the infrastructure in relatively short order.

WAPA in STT has about 100 MWe of installed capacity. Daily demand is about 50MWe. At an average construction price for power plants at $1,000 per kWe of capacity, that comes to $100M. That does not include the T&D (wires, sub-stations, towers, etc.) nor the Desalination equipment / pipe network. So to include that we double it, and double it again to cover STX (.... we throw in STJ for free) and we get $400M. Maybe this is why Southern Company was denied. But as I read the article, they just wanted a controlling interest --> as it should be, "....Southern Energy Inc. has reportedly upped the ante for a controlling share of the V.I. Water and Power Authority."

In any case, new ownership would not be able to lower the LEAC part of the cost ($0.33 per kWh) immediately. But they could improve reliability with new investment $$$, which the govt. and WAPA does not have. And eventually, they could develop capacity that will be cheaper to run. If S. Co. or other utility did buy WAPA, there could be PUC penalties imposed if they do not meet cost improvement targets over time.

NOTE, the current 100 MWe all runs on fuel oil and so there is no immediate escape from LEAC.

Cruz quotes verbatim the arguments that were presented against the Southern Energy purchase...

Selling WAPA will not change the price of oil.
Selling WAPA will not make the govt pay their utility bills on time. Will it be ok for the new company to disconnect the hospital or schools because of non-payment?
Selling WAPA will require a HUGE investment by the new company to upgrade equipment. Will the consumers be ok with this cost being passed on to them?

Selling WAPA doesn't fix anything but pass on the problem to a new owner.

...and dntw8up correctly debunks them all.

Cruz and the thousands who share that view are saying that Virgin Islanders do not deserve reliable, affordable power, or for that matter, paved roads, law enforcement, healthcare, etc.

In the case of Southern Energy, I understand the concept that 'the devil we know is better than the devil we don't.' But when, for heaven's sake, will Virgin Islanders realize that they are paying for and entitled to the quality of government and infrastructure services which is vastly in excess of what we receive?

May I inquire as to why the VI, especially STX does negotiate an agreement with Hovensa to purchase the diesel used to generate power at greatly reduced cost to help the residents of VI's?

Where is the logic behind these agreements?

How long is the contract or binding agreement with LEAC?

Logic? It's plain old corruption. The good of the local populous is not one of the VI government's concerns.

Selling WAPA will not change the price of oil.

True but irrelevant, because most places in the U.S. have much lower rates despite the price of oil.

There are many other alternatives in the US that is used to generate power. Such as Nuclear, Natural Gas, Coal, and there's also a power grids that power companies can hook up to. So the oil argument is very relevant in reference to the Virgin Islands and WAPA.

Selling WAPA will not make the govt pay their utility bills on time. Will it be ok for the new company to disconnect the hospital or schools because of non-payment?

A specious argument, because the government takes in plenty of tax money that could be used to pay the hospital and school WAPA bills, it just prefers to waste that money in ways that benefit corrupt individuals.

"Plenty of tax money"?!?! This is the same government that hasn't collected property tax since 2006! This is also the same government that has been giving corporate welfare to any Tom, Dick, or Harry that comes to the Virgin Islands with their hand stuck out and smile on their face.

Selling WAPA will require a HUGE investment by the new company to upgrade equipment. Will the consumers be ok with this cost being passed on to them?

I suspect that if the money WAPA takes in was properly re-invested in the infrastructure -- as opposed to lining the pockets of corrupt government employees -- there would be sufficient funds for upgrades relatively quickly.

Now who's making specious arguments here. Please provide some instances to your claims of WAPA "lining the pockets of corrupt govt employees"
And I'll provide some instances of WAPA re-investing in the infrastructure; C'sted Underground Project, Waste heat boiler on STX plant, New Substations on STX

Selling WAPA doesn't fix anything but pass on the problem to a new owner.

Arguably incorrect as WAPA's problems are its management, and efficient management could repair the infrastructure in relatively short order.

Again....provide instance to your claims.

Cruz quotes verbatim the arguments that were presented against the Southern Energy purchase...

Selling WAPA will not change the price of oil.
Selling WAPA will not make the govt pay their utility bills on time. Will it be ok for the new company to disconnect the hospital or schools because of non-payment?
Selling WAPA will require a HUGE investment by the new company to upgrade equipment. Will the consumers be ok with this cost being passed on to them?

Selling WAPA doesn't fix anything but pass on the problem to a new owner.

...and dntw8up correctly debunks them all.

Cruz and the thousands who share that view are saying that Virgin Islanders do not deserve reliable, affordable power, or for that matter, paved roads, law enforcement, healthcare, etc.

In the case of Southern Energy, I understand the concept that 'the devil we know is better than the devil we don't.' But when, for heaven's sake, will Virgin Islanders realize that they are paying for and entitled to the quality of government and infrastructure services which is vastly in excess of what we receive?

And I just correctly debunk all of dntw8up assumptions......you're also free to refute if you can

Sorry Cruz, but what you wrote makes no sense: Many locales besides the VI rely on oil for their energy; the VI government gets the majority of its tax revenue by means other than property taxes; if you think I'm being "precocious" you don't know the meaning of the term; and it is obvious to everyone -- except perhaps you -- that the VI government is corrupt.

Logic? It's plain old corruption. The good of the local populous is not one of the VI government's concerns.

I'll agree with you here, that the agreement between the VI govt and HOVENSA to purchase oil for WAPA is a deal that mostly benefits HOVENSA.

It is also my understanding that the agreement was totally brokered by the Government and WAPA was not brought to the table.

Sorry Cruz, but what you wrote makes no sense: Many locales besides the VI rely on oil for their energy; the VI government gets the majority of its tax revenue by means other than property taxes; if you think I'm being "precocious" you don't know the meaning of the term; and it is obvious to everyone -- except perhaps you -- that the VI government is corrupt.

Again...locales in the US, can connect to power grids and purchase power. In these time it would be ludicrous for US power companies to totally rely on oil for their power generation.

I also mentioned the corporate welfare that's occurring in the VI.

It's seems like you're purposely picking and choosing certain parts to refute that's convenient to you.

Precocious was a typo......Your arguments LACK MERIT thus you are being specious.

And I agreed with you on the last point.

another WAPA protest scheduled for 3:30pm Friday starting at Pueblo, Golden Rock with a march to the gov't house.

I find it interesting that Mr. Hodge of WAPA gets on TV and tells people in the VI that solar and wind "aren't viable options to the energy problem here." Barbados has been using a variety of renewals for years now. What's the difference in the islands? Interestingly, 6 Caribbean nations out of 20 applied for and received grants for renewable energy programs in solar, geothermal and wind. The grants are from Obama's foreign aid reform and the OAS. www.devex.com/en/blogs/development-assistance-under-obama/us-helps-6-caribbean
Even the smaller country of Dominica is purchasing and installing solar. www.ehow.com
Puerto Rico is forging ahead with renewable energy sources.

Bottom line is: if the VI wanted solar, wind, hydro or alternate energy, it would be in use right now.

What is really sad is that 5 yrs from now, most of the Caribbean nations will be into green energy moving ahead into the 21st century and the VI will still be lagging behind with their businesses closing from extroardinary high elect bills.

Even without the benefit of nationwide grids and "other alternatives," local hotels have generated their own electricity more reliably and cheaper here in the VI, and they've been able to do it while paying the rack price for oil, using relatively inefficient piston-driven generating equipment, and on a tiny scale. Thus the price of oil has absolutely nothing to do with the inflated price we pay for electricity.

The Christiansted underground project was mandated and paid for by the US Department of Interior. WAPA cannot claim credit for that, nor can it use any incurred expense to justify price gouging.

There are, in fact, $hundreds of millions in Federal funds which go largely unspent year after year in the territory, which we will almost certainly lose as the Federal budget gets tightened. This money has been available for road improvements, infrastructure improvements, education, health, law enforcement, and so on. After 10 or more years of being rolled over,the unspent money will be lost.

I'll repeat, with dismay, that the attitude among Virgin Islanders seems to be that we do not deserve quality services and fair prices.

another WAPA protest scheduled for 3:30pm Friday starting at Pueblo, Golden Rock with a march to the gov't house.

I find it interesting that Mr. Hodge of WAPA gets on TV and tells people in the VI that solar and wind "aren't viable options to the energy problem here." Barbados has been using a variety of renewals for years now. What's the difference in the islands? Interestingly, 6 Caribbean nations out of 20 applied for and received grants for renewable energy programs in solar, geothermal and wind. The grants are from Obama's foreign aid reform and the OAS. www.devex.com/en/blogs/development-assistance-under-obama/us-helps-6-caribbean
Even the smaller country of Dominica is purchasing and installing solar. www.ehow.com
Puerto Rico is forging ahead with renewable energy sources.

Bottom line is: if the VI wanted solar, wind, hydro or alternate energy, it would be in use right now.

What is really sad is that 5 yrs from now, most of the Caribbean nations will be into green energy moving ahead into the 21st century and the VI will still be lagging behind with their businesses closing from extroardinary high elect bills.

Sorry CAGal, but you got your facts out of whack.
The grants going to those 6 Carib countries are for "demonstration" projects... solar water heaters, solar panels in a national park, and the like, ...in other words.... a lot of the same thing we have going on around here.

In fact, the USVI has received MILLIONS in stimulus funds to promote green innovations. And there are huge tax rebates for VI residents wanting to install solar, wind and solar heaters. Read http://www.vienergy.org/ for all the details.

Furthermore, Mr Hodge DID NOT come out against WIND. As a matter of fact, the other day on 1620 he described AT LENGTH the current testing which is being done to determine wind strength at certain places on STX.

He was saying that wind is only part of the solution. It can't replace diesel. The PROBLEM is that the wind doesn't blow all the time, and you cannot store the quantity of electricity needed to power the grid. The grid must be constantly fed. Thus, his point was that solar and wind were only "PART" of the solution.

It's interesting that we're complaining now (again) when Hodge did in fact try to get some sort of COKE generating plant going, and it was shot down in flames. Not a big fan of COKE, but for the foreseeable future, we will need to rely on SOME FORM of fossil fuel, ...even while wind and solar are brought on line.

Note regarding Solar... the size of a solar installation needed to provide even 10% of the territory's needs would have to be ENORMOUS, and prohibitively expensive.

Geothermal is great, but we don't have geothermal options in the USVI.

LP Gas would be wonderful, but the cost of building an LP port is nearly prohibitive.

Wind is the only technically feasible "green" option right now.

----
Last but not least.... I'm glad some hotels can afford to generate their own electricity for their own limited property.
But WAPA must provide electricity across a landscape to citizens who can't afford their own generating plants. It's apples and oranges.

What is really sad is that 5 yrs from now, most of the Caribbean nations will be into green energy moving ahead into the 21st century and the VI will still be lagging behind with their businesses closing from extroardinary high elect bills.

X2

Neil, the issue isn't that hotels "can afford to generate their own electricity" but that they cannot afford NOT to.

I agree. Tthe hotels generate their own power because they cannot afford outages. It actually costs them more, including a huge original capital outlay.