The territory’s only functioning solar farms might go dark if the Water and Power Authority doesn’t start paying for the electricity it takes and resells, company officials told regulators Tuesday.
BMR Energy’s two companies, Spanish Town Estate Solar in St. Croix and Donoe Solar in St. Thomas, sell solar-generated electricity to WAPA at between 17 cents per kilowatt hour and 13.9 cents per kilowatt hour — far less than it costs WAPA to generate a kilowatt hour, CEO Bruce Levy told the Public Services Commission.
WAPA paid for three months when the contracts were signed and then stopped, with the exception of one recent payment, Levy said. The outstanding bill is now near $5 million.
“What’s been happening for the last two and a half years for Spanish Town, and a year or so for Donoe, is we’ve been delivering power and WAPA has not been able to pay. We’re going broke. We’re still here but just barely. We don’t fix things when they break and it is unsustainable,” Levy said.
BMR’s contract with WAPA runs through 2039 on St. Croix and 2048 on St. Thomas. At the current rate, the solar energy provider would be long out of business by those dates, Levy said. WAPA was stealing BMR’s product and reselling it to its customers, he said.
Levy presented the PSC commissioners three options to mull: WAPA could pay its bill; the solar farms could go out of business; or, the PSC could allow BMR to sell directly to a select group of high-use customers, partially breaking WAPA’s six-decade monopoly in the Virgin Islands.
Within three months, he said, these 15 or 20 customers could be paying a lower rate per kilowatt hour billed in part by BMR and in part by WAPA. The plan would run three to five years, said BMR’s attorney, Adam Marinelli, allowing WAPA time to get the high-efficiency Wartsila generators online using cheaper-than-diesel propane.
WAPA’s legal counsel strenuously objected to the proposal, saying a contract dispute between the companies was outside the scope of the PSC, which oversees utility rates, telecommunications services, and franchised ferry services.
Marinelli called the argument a misrepresentation. The payment dispute was almost certainly headed to court, which was unfortunate, he said, because courtroom battles are expensive.
“That’s not something that WAPA should encourage,” he said. “They should stop pressing that envelope.”
BMR was not asking the PSC to consider the contract, however, but whether to allow the sale of electricity, which was within the PSC’s purview, Marinelli said.
After the PSC meeting, Marinelli said BMR was not interested in becoming a utility competing with WAPA nor in bleeding WAPA at a time when it was already financially challenged. BMR only drew up the plan as a way to remain solvent.
Commissioner David Hughes suggested, if WAPA wasn’t paying its solar bills, an alternative solution would be to reduce funding allotted specifically for those payments.
“We need to remove the financial incentive for the utility to act in this way,” Hughes said.
The PSC said both sides would formally argue the matter at their Oct. 8 meeting.
WAPA received a fuel delivery as expected over the weekend and had roughly 14 days of fuel on hand, said Executive Director Karl Knight.
“It’s a couple weeks of fuel,” he said. “It’s not a large order.”
He hoped for a second delivery to arrive Sept 18.
