Just over one month into leading the Water And Power Authority, Andrew Smith has identified areas where the financially embattled utility has lost focus.
It’s common for people facing a mountain of personal debt to lose track of the basic things while fretting the monumental ones. Saving cash by not gassing the car means missing work, which makes for smaller paychecks and less money to pay the credit card down. It’s something of a manic spiral that’s difficult to see when spinning inside.
Businesses and organizations like WAPA are no different, said Smith, who took over as chief executive officer on Jan. 10. While not losing sight of the bigger problems, keeping the basic things going leads to smooth day-to-day operations, which leads to better and more reliable water and power service.
“I’ve been very deep in the weeds on a lot of our small vendor payments,” he said Friday afternoon. “We’re not paying $2,500 or $3,000 items. And that creates: We need to rent a piece of equipment to do something we have planned, and we can’t rent the equipment because we owe somebody $2,500. We run around for two days. We take two full-time employees’ time. It’s a complete waste of time and effort for a $2,500 check. Write the check.”
It’s one of countless seemingly minor issues that plague the authority because of a lack of preparedness, he said. “Hey, let’s have the bucket of water before we find the fire. Right now, we find the fire, and then we go run around and look for the bucket. We’ve got to flip that around and get to where we’re out ahead of the issues.”
The same holds true for WAPA’s fleet of service vehicles. If the trucks aren’t operational, inspections and repairs can’t be done — which leads to crumbling infrastructure and then outages, Smith said.
“If the light-duty truck doesn’t work, we can’t do the work. So it’s little things like that that are not big, big dollars to the grand scheme of the Water And Power Authority. We’ve lost focus on that,” he said.
WAPA leaders of the past can be forgiven for potentially being overwhelmed. One of the first articles the VISource wrote when it debuted in 1999 was about dysfunction in and around the territory’s water and power authority. WAPA was often forced to balance borrowing to pay for fuel while trying to collect multi-million-dollar outstanding debts from the V.I. Government itself. More than a decade into reporting on the subject, The Source ran an eight-part series on problems at WAPA and how they stretched far beyond the authorities’ board rooms.
Smith said in his three decades in and around utility companies, he’s worked with half-a-dozen or more operations facing financial difficulties.
“The common theme I’ve found across those varying companies is, the companies get so focused on the financial difficulties that they lose sight of how to run the day-to-day business effectively. That is very much the case here,” he said. “We have limited resources, so we’ve got to make sure we’re aligning those limited resources with the best outcomes. I don’t know that that’s always been done. I wasn’t here, obviously, but we will approach the future with that dynamic in mind.”
Part of these best practices, he said, is to look at the real short-term and long-term benefits of things. Holding out on a contract for cheaper fuel may seem frugal, as an example, but not if it causes customers to pay for more expensive water and power longer.
Federal funds are vital to the territory but can take a long time to apply for, get approved for, and get authorized to use. It’s an ideal revenue stream for long-term projects like burying power lines. But a new solar farm or battery purchase could benefit the territory right away if built with an outside contractor. Savings from the project would be lost if WAPA waited for federal funds, he said.
“We’re displacing a very expensive inefficient fossil fuel generation with that,” Smith said. “Let’s say any of the big solar or wind developers could come in and do that in 12 to 14 months — maybe 16, but it’s a relatively short time frame. That same project for us to go from inception to commercial operation with a federal partner is a longer process, right? It doesn’t mean it’s a bad process. It’s just a longer process.”
WAPA needs to look at these situations differently than they have in the past, he said. Looking to the future, the Virgin Islands — with its limited population, limited resources, and isolation of two small grids in St. Croix and St. Thomas/St. John — is an ideal testing ground for how to build a resilient next-generation power authority.
“Everybody’s got the buzz words, micro-grid and all that, but that’s real here. That’s the reality here,” he said. “That is the future of the territory.”
Smith said he has thus far had a very good relationship with regulators and other partners in the V.I. government.
“We’ve got to work collaboratively with our commission. It’s not just us making a decision in a vacuum,” he said.