The Virgin Islands Water and Power Authority governing board called an emergency meeting on Friday to approve a new liquefied petroleum gas supply contract, following an executive session in which legal and personnel matters were discussed.
Much of the meeting was held in executive session, and no formal action was taken during that closed-door discussion. However, when the board returned to open session, members received an update on the negotiated fuel supply agreement before taking a vote.
Executive Director and CEO Karl Knight outlined the terms of the fuel supply agreement with Carib LPG, which includes fuel delivery logistics, credit terms, and a community contribution component.
Knight said the contract is for two years with an option of extending to a third year. It includes a supply agreement of two million barrels, with a plus or minus 20% option, meaning the authority’s minimum commitment would be approximately 1.6 million barrels. The contract includes transportation costs of 48.5 cents per gallon, six transportation costs, plus the market index price based on the Mont Belvieu market rate.
The agreement calls for shipments of approximately 45,000 barrels per cargo and includes transportation, off-loading, and shuttle service between St. Thomas and St. Croix. Knight said the supplier has secured dedicated shuttle vessels between the islands, which WAPA has already been using during the month of March.
He explained that the contract requires WAPA to provide a three-month projection of fuel needs, while the supplier must provide a firm 30-day delivery schedule and narrow delivery dates to a three-day delivery window. The authority will also provide regular inventory updates to help forecast fuel demand and avoid supply disruptions.
Knight also highlighted improved shuttle service between St. Thomas and St. Croix as a major benefit of the agreement.
“We’re able to take on fuel, turn around and shuttle fuel, and those are one-day operations instead of a day and a half or two days,” Knight said. “So that is an improvement to our shuttle service under this contract.”
Another key component of the agreement is a credit arrangement that allows WAPA to pay for fuel deliveries after receiving shipments rather than prepaying. Knight said payment for a delivery would not be due until just before the next delivery, providing more financial flexibility than recent fuel supply arrangements that required prepayment.
The contract also includes a corporate social responsibility component requiring contributions of no less than 10 cents per gallon — up to 15 cents per gallon — toward charitable and community initiatives in the Virgin Islands over the life of the contract.
The board had previously authorized WAPA to negotiate a new LPG supply contract following a competitive bidding process that produced lower prices and more flexible payment terms than the authority’s previous agreement. During earlier discussions, officials said Carib LPG Trading Ltd. offered a price of about 48.5 cents per gallon — slightly higher than the lowest bidder — but included a credit facility estimated at roughly $3 million, hurricane-readiness measures, diversified supply options, and a corporate social responsibility program.
WAPA officials said the credit arrangement was a key factor in the decision, as prepayment requirements from other proposals could have strained the authority’s cash flow and potentially delayed fuel deliveries. Based on typical shipment volumes, the authority estimated the new contract could generate millions of dollars in annual fuel cost savings compared to the expiring agreement.
At the time, Knight said the credit terms were intended to prevent a repeat of past situations where fuel shipments arrived while the authority was still working to secure payment, which contributed to fuel shortages and service disruptions.
Board members said the agreement was the result of extensive negotiations between WAPA’s management team and legal staff and represents a more stable fuel supply partnership for the utility. The board voted to approve the Carib LPG contract as amended.
Board members present for the meeting included Chair Maurice K. Muia, Xavier Acevedo, Joan Foy, Kyle Fleming, and Cheryl Boynes-Jackson. Knight and members of the authority’s management team were also present.
