Leased Generator Surcharge Pays Cost of WAPA’s Mandated Rental Units

Randolph E. Harley Power Plant on St. Thomas

The implementation of a lease generator surcharge on the bills of Water and Power Authority (WAPA) ratepayers, which took effect on July 1, allows the Authority to pay for the smaller, more efficient rental generators now operational at both power plants.

WAPA Executive Director Lawrence J. Kupfer explained that in 2016 a management audit was conducted, and an integrated resource plan was developed at the direction of the Public Services Commission. The plan called for WAPA to add more efficient and smaller generating units to its power plants. The units, rentals from APR Energy, were introduced at the Randolph Harley Power Plant in 2016 and 2018. On St. Croix, at the Estate Richmond Power Plant, the requested units were brought on line this year in the form of rentals from Aggreko.

“While WAPA met the requirements of the plan, rates to pay for the rentals were not approved, although the realized savings from the more efficient units (lower fuel consumption to generate electricity) were passed on to customers through the fuel surcharge or LEAC.” Without rates to pay for the rental units, WAPA was unable to pay APR Energy resulting in a significant payable to the company.

Estate Richmond Power Plant on St. Croix

Facing a budget shortfall of $45 million dollars, WAPA applied to the Public Services Commission in December 2018 for the lease generator surcharge. It was conditionally approved by the commission in May. The Authority was given the go ahead to assess the surcharge when conditions, set by the commission, were satisfied. Among the requirements were certification that the Wartsila and Aggreko units were fully operational and that the base rate case petition had been filed with the commission.